Data | As foreign workers leave, are we braced for Brexit?
Brexit has been on the back burner because of covid-19, but it is already putting huge pressure on construction’s skills base, says Kris Hudson
Construction continues to adapt to the changing covid landscape, but a significant test on skills capacity now looms due to Brexit.
At the time of the EU referendum in Q2 2016, more than one in eight workers on a UK building site were born abroad. Since then, analysis of the Office for National Statistics’ Labour Force Survey shows this has dropped to one in 10.
A continuing trend, when the UK leaves the EU on 31 December 2020, threatens to further destabilise the construction industry’s supply chain. Skills shortages, project delays and price increases may be round the corner.
In theory, London could be the hardest hit as it relies on the highest proportion of migrant labour of any region across the UK. Almost half (49.6%) of the capital’s construction labour force were migrant workers when people voted to leave the EU. This has fallen to 36.6% in four years.
Furthermore, data from recruitment sites suggests that job posts within the UK construction sector have increased faster than any other industry, rising more than 50 percentage points since June 2020. If borders are closed as a result of Brexit, the effect could see short-term increases to prices as labour flows are restricted.
While there is clearly an immediate Brexit risk to the supply chain, the scale of the future challenge is amplified by a maturing demographic.
As of Q2 2020, 49.1% of construction workers were aged 45 and above, while the proportion of younger workers is in decline. Only 2.6% of the sector’s workforce was made up of 16 to 19-year-olds. That is half the number it was 15 years ago.
This creates a ticking time bomb. As the workforce approaches retirement age there may not be enough fresh talent joining the industry to replace them, resulting in a net loss of skills and the ingredients for a cliff edge in capacity.
The Construction Leadership Council has launched a Brexit Working Group aimed at preparing the industry for new immigration rules, and providing help accessing alternative labour supply. Detailed risk analysis, evaluation of supply chains and early warning notices can act as best practice to mitigate the rising challenge of importing labour from abroad.
However, the UK’s challenges are as much long-term as short. To deliver on the government’s ‘levelling up’ agenda, through and beyond Brexit, construction must regain and retrain at pace and modernise its ways of working by drawing on a more diverse pool of talent.
Kris Hudson is an economist and associate director at Turner & Townsend