Anyone that works in the construction industry knows that costs have increased significantly over the last 12 to 18 months. Are they now at breaking point? With the costs of materials and labour escalating, how are organisations that support the sector, managing?
We caught up with UAS Founder and Director, Lee Graham, to get his take on what’s been happening within the sector and how UAS are responding.
The Labour Market
“Finding good people has never been easy, but it’s become increasingly difficult recently,” says Lee. “Demand has increased as lockdown measures have eased and customers are catching up on the backlog of projects. This has happened at a time when we’ve seen skilled workers leaving the UK as a result of Brexit.”
This is supported by the latest figures from the Office for National Statistics (ONS), stating labour shortages are at a 20 year high. The data shows that between March and May of this year, the number of UK construction job vacancies has risen to 35,000, the highest since records began back in 2001. The figure has risen by 6,000 from the previous period.
“We continue to attract people to work for us though. Now, more than ever, we’re ensuring we look after our staffs’ mental health and wellbeing, just as much as we do their physical health. Covid continues to effect families and we are cognizant of these impacts.”
The price of materials has also significantly increased over the last 18 months. Many sectors have been impacted by the global timber shortage, but the impact for scaffolding companies like UAS is that the price of boards have more than doubled in price.
“I’m being quoted £18 a board and if that is if you are able to source them. In January, rates were half of this. Timber and steel are both in high demand and short supply as a result of the pandemic,” says Lee.
Lee’s comments are aligned with a recent press release from the Construction Leadership Council (CLC) that warns UK business of the shortage with no clear end in sight. Additionally, Europe, where approximately 80% of the UK’s softwood is imported from, traditionally shuts down this month, which will only add to the supply issue. The recent fires in North America will also impact global supply as they also look to Europe to cover any shortfall.
Lee goes on to add, “As a business, we are fortunate enough to have a decent stock of materials and plant, however, it is now more important than ever that clients’ acknowledge these increases in costs. Ultimately, we need the market rates to reflect the increases we are all experiencing. We’re being asked to quote on jobs, where the incumbent supplier was unable to continue to carry out the works which demonstrates the squeezing of the market and the ready availability of resource. From talking with colleagues in the industry, SME scaffolding companies are struggling with cashflow and no uplift in rates. Work is there but the market rate “normalization” has not made it through to clients as yet.”
Support from the government and trade bodies
“Trade bodies have socialised the challenges the industry is facing,” says Lee. “Many sectors have been terribly hit as a result of the pandemic. The Government will no doubt continue to provide investment for new projects, however, demand isn’t necessarily the issue – it’s one of supply. Timber especially; the demand is not just a UK issue but across Europe as well. We have seen the rise in shipping costs and how luxury items are paying premium to have their goods moved as a priority.
Similarly, labour – we can’t just magic people up. What we can do, and have done for many years, is invest in training and development to nurture and develop our staff. We also hire apprentices and are looking to work with the local community and schools to showcase what a career in the sector can look like.
What’s your one piece of advice?
“Don’t under value your preferred supply chain. Do support them and they will support you in return. If you find yourself in a position to offer an uplift, do so. Work in partnership with your suppliers (and clients!). It’s been a tough time for all of us – let’s get through this together,” says Lee.
“I’d be really interested in hearing other thoughts on this subject. Everyone is in the same boat, but I don’t hear many people talking about it. Leave comments in the chat!”