Exodus of EU workers leaves UK construction industry facing shortages

An exodus of EU workers from the UK has left the British construction industry facing an acute shortage of labourers in some specialist trades and a looming crisis for the government’s “build back better” strategy.

Industry associations and construction companies said that unless urgent steps were taken, work on some projects might slow this summer.

The sector is already under pressure because of an ageing workforce, a shortage of key building materials such as timber and steel as well as Covid-19 restrictions, which require greater social distancing on sites. 

The need to retrofit buildings to meet net zero emissions targets as well as big infrastructure projects such as the high-speed rail project HS2 are also increasing demand for workers. Since January 1, it has been harder for EU workers to enter the UK and the construction industry was one of the sectors most reliant on workers from the continent. 

Suzannah Nichol, chief executive of Build UK, which represents the UK’s largest contractors and about 11,500 specialist businesses, said the group was planning to lobby the migration advisory committee, the independent public body that advises the government, for a “more nuanced approach to immigration”.

“There are already lots of pockets of shortages in specific trades and across particular spots in the UK,” she said.

Employment in the construction sector fell from 2.3m in 2017 to 2.1m at the end of 2020, representing a 4 per cent fall in UK-born workers and a 42 per cent fall in EU workers, according to the Office for National Statistics. More than 500,000 UK-born construction workers are expected to retire in the next 10 to 15 years. 

Iain McIlwee, chief executive of the Finishes and Interiors Sector trade body, said that by the end of March, almost half of its 550 members were reporting labour shortages.

“It’s not so much that we can’t or won’t change and train or retrain UK workers but that the timescale is unrealistic,” he said. “There simply isn’t enough flex in the new immigration system.”

Steve Hadley, chair of the Federation of Piling Specialists, said it planned to lobby the migration advisory committee for a temporary amendment so it could fill posts such as rig and plant operators.

“The post-Covid recovery and HS2 will cause a surge in demand that cannot be met by current labour levels,” he said. “This is further complicated by the difficulty in bringing skilled workers from overseas for non-qualifying roles post-Brexit.”

Demand for housing refurbishment has surged during the pandemic but Brian Berry, chief executive of the Federation of Master Builders, which represents small and medium-sized building companies, said more than a third of its members were struggling to recruit bricklayers and carpenters.

“If we are to build back better and greener from the pandemic, then urgent steps must be taken to encourage people into construction,” he said.

Shortages are most acute in the capital. Construction employment in London fell from 311,124 workers in 2017 to 261,271 at the end of 2020, representing a 2 per cent rise in the UK-born workforce and a 54 per cent fall in EU workers.

Ian Anfield, managing director of Hudson Contract, which supplies payroll data to 2,500 construction companies, said the shortage had pushed up average earnings in London by 4.5 per cent during May, to £885 per week.

“We are starting to see the impact of people leaving the UK ahead of the EU Settlement Scheme deadline on June 30 and not being replaced by incomers,” he said.

The Home Office said: “Our new points-based immigration system makes clear that employers should focus on investing in our domestic workforce, especially those needing to find new employment, rather than relying on labour from abroad.”