How is the Cost of Living Crisis Impacting the Construction Industry?
20th September 2022
Individuals and industries across the UK are currently contending with the cost of living crisis, and the construction industry is no different.
A report published by construction industry intelligence provider Barbour ABI, has revealed that construction is facing the challenges of the cost of living crisis alongside inflation and disruption to supply chains attributing these issues to a 25% inflation in building materials, ongoing issues from the pandemic and the conflict in Ukraine.
The report takes into account data from various stages of the construction pipeline to provide a clear picture of the industry. It found that, although June appeared to be a better month that May (with a 15% increase in contracts awarded), overall Q2 was below the record levels seen in Q1. However, Tom Hall, Chief Economist at Barbour ABI, has stated that ‘nonetheless it is good news that new work is progressing, albeit at lower rates than previously’.
Despite this slight slowdown, employment in the construction sector has continued to rise according to the Office for National Statistics (ONS), now employing 2.65 million professionals, a very positive sign for those in the industry.
How is construction navigating the cost of living crisis?
Investing in green skills
Whilst more of a longer term strategy for construction businesses, investing in green skills is critical to ensuring the business can remain competitive for future projects. With the construction industry working to a very ambitious goal of Net Zero Carbon by 2050, sustainable construction practices and the green skills required to take these on will be crucial in the months and years to come.
Supporting the workforce
Of course, aside from looking at how the cost of living is impacting the business itself, construction employers throughout the UK are taking the time to check in with their workforce to support them in any way they can, whether this be pay rises, mental health support and, of course, investing in their career by putting them forward for further training to upskill.
As the COVID-19 pandemic has highlighted, the construction industry is highly resilient and has shown it can adapt to even the most challenging of circumstances. With government intervention expected following the appointment of the new Prime Minister Liz Truss, we will keep you updated on how future plans may work to support the industry.