Confidence low as half of construction firms report income fall

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A tough 12 months for theUK’s construction sector have kept confidence at low levels, with around one in ten employers fearing that their business won’t survive the recession, new research reveals.

In the Employer Attitudes and Motivations report by Sector Skills Council and Industry Training Board, CITB-ConstructionSkills, results show that nearly half (47%) of all businesses suffered a decrease in turnover in the last year – with income falling by an average of 29%. Sole traders were hardest hit, with 54% reporting a drop in trade, followed closely by small firms employing between two and nine staff, at 48%.

Furthermore, for many in the industry, the immediate future offers little consolation. Nearly three fifths (56%) of respondents said that either the next 12 months provided no business opportunities (29%), or that they didn’t know where the opportunities would come from (27%).

These trends have taken their toll on employment levels across the sector, with over a third (36%) of employers surveyed claiming to have laid staff off.Britain’s woodworking industry was the most adversely impacted, with a quarter (25%) of the affected jobs being carpenters or joiners, just ahead of labourers at 24%. However, the impact on employment has not been restricted to the trades, in larger firms – those with over 100 employees – it was managers (23%) who were more likely to be made redundant.

Mark Farrar, Chief Executive of CITB-ConstructionSkills, said: “It has been another testing year for the construction and built environment industry. Times are tough and businesses need as much support as possible.

“Through listening to employers we know that their main challenges are reducing their expenditure, increased competition for contracts and preparing for new environmental legislation.

“We are further developing training packages to address these concerns, consulting with central and local Government to ensure that the public money which is being spent is done so transparently with a positive impact on the industry’s skills and continuing to speak with central and local governments about the positive impact construction has on local jobs.

“We’ve also implemented initiatives such as our Cut the Carbon campaign, which help to prepare the industry for new ‘green legislation’ and give them the skills they need to be as competitive as possible.”

On a regional level, there were mixed fortunes for different areas. In the South East, for example, indicative figures show that there was a 13% spike in overall staff numbers, compared to a reduction of between 16-18%  in Northern Ireland, London and the South West.

The impact of the current economic climate has also seen training levels in the industry fall – with almost a third (29%) of businesses reducing their outgoings in this area. This pattern looks likely to continue into 2012, with a fifth (20%) of employers planning to scale training budgets back even further.

Mark Farrarcontinued: “When budgets are tight, training is sadly often one of the first areas to be reined in. This is particularly concerning given that one in six workers will retire in the next ten years, leaving a gaping hole in the industry’s skill base.

“We add value to employers in this area through a number of ways, such as our Management & Supervisory Development Programme which was introduced to improve the sector’s leadership attributes. But we’ll also continue to provide new, innovative solutions that respond to the industry’s changing needs.

“Only through swift action can we start to generate the right skills for future growth, locally and nationally.”


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