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Employment Trends in Construction

Published: May 2000

Key Findings

The nature of the construction industry makes it difficult to match skill demands with training effort.

• In the past construction output and employment have fluctuated by up to a fifth as the nature of the industry has exaggerated the boom-bust cycle of the economy. This feature of the industry has made it very difficult to synchronise skill demand and training, especially as it takes two years of formal training for building trades workers to reach a basic standard.
• Maintaining the skills base within the industry is also undermined by the relatively high cost of training skilled workers, the high level of self-employment and sub-contracting, and construction's high occupational turnover.

Forecasters do not expect there to be major employment growth in construction.

• Construction output is growing more quickly in the West Midlands region than in the UK and output in Birmingham has been growing more quickly than in the Region. Construction output in the West Midlands is forecast to increase slightly more quickly than the rest of the country between 1999 and 2000.
• Although construction output is forecast to grow over the next ten years it is predicted that it will be at such a steady rate that productivity gains will mean that any increase in employment will be very small at both the UK and West Midlands level.

It is possible to forecast future training needs but much more difficult to forecast whether the training will occur.

• We expect the greater stability that the industry has been exhibiting in recent years (and which is forecast to continue) to make it easier for the supply of and the demand for skills to balance in construction.
• However, according to CITB estimates for the UK, newly trained entrants into skilled building trades did not meet the demand for new entrants by a factor of 17% in 1999. It is difficult to predict whether this shortfall will continue for many years as enrolments onto FE construction courses fluctuate greatly from year to year. UK enrolments have been as high as 37,500 in 1990 and as low as 27,000 in 1993.

Birmingham Residents and the Construction Labour Market

• For the purposes of construction there isn't a Birmingham based construction labour market because of the extreme mobility of building workers. In 1991 57% of Birmingham residents employed in construction worked elsewhere in the Region or even in other regions. Any attempt to analyse construction training needs for Birmingham must therefore take account of this regional dimension.
• Relative to the Region as a whole Birmingham is enjoying a building "boom".
• The nature of the industry means there are no statistics in existence that adequately identify the actual number of construction jobs that are located in Birmingham. However, the number of residents in construction employment has been trending upwards since 1992. Moreover, the number of resident's with jobs in construction fluctuates with Birmingham based building vacancies. This suggests that local people have benefited from the current buoyancy of construction in the city
• Although the number of unemployed construction workers in Birmingham has fallen by 11% over the past year there is an unexplained concentration within Birmingham. In April 1999 a third of the Region's unemployed building workers lived in the city which is twice the proportion expected. Birmingham residents do not appear to benefit as much from the construction industry as they should do.
• The usual occupations of the 3,715 unemployed building workers living in the city show a mis-match with the occupational structure of construction vacancies.

From the last two points it can be concluded that any training effort intended to fill the skill needs of the buoyant local construction market should begin with the adequate supply of local unemployed building workers. Many of these people already have the necessary skills, so a programme to refresh and extend these skills would meet skill demands far more quickly than training new people "from scratch".