The UK construction industry could lose 8% of its workforce if the government fails to retain access to the single market in its Brexit negotiations with the EU, the RICS has warned.
The industry body estimated that 176,500 workers from the EU were currently employed in the UK construction industry.
Their departure would hit a sector already facing skills shortages and put some of the country’s biggest infrastructure and construction projects under threat, it said.
Jeremy Blackburn, head of UK policy at the RICS, called on the government to act.
Ballet dancers won’t solve the housing crisis, yet their skills are currently viewed as essential - Jeremy Blackburn, RICS
“A simple first step would be to ensure that construction professions, such as quantity surveyors, feature on the UK Shortage Occupations List,” he said.
“Ballet dancers won’t improve our infrastructure or solve the housing crisis, yet their skills are currently viewed as essential, whereas construction professionals are not.
“Of course, we must also address the need to deliver a construction and property industry that is resilient to future change and can withstand the impact of any future political or economic shocks — key to that will be growing the domestic skills base.”
The loss of EU nationals from the construction workforce would heap pressure on developers’ profits at a time when construction costs are already on the rise.
In a recent investor note, JP Morgan found build costs in the London office market increased by 19.6% last year.
The growth was driven by a 45% increase in commodity prices, an 8% increase in material prices, a 7% increase in labour costs and a 19% increase in the strength of the US dollar against the pound.
JP Morgan warned that London office developers could see development profits plunge by 80% from their peak because of increasing construction costs and falling rents.
The bank also highlighted the danger posed by Brexit.
“Brexit could result in greater upward pressure on labour costs in the UK as restrictions on European workers will likely lead to further shortages in the UK’s pool of skilled workers in the construction industry,” it said.
10 March 2017
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