Labour and material shortages likely cause of surprise drop in construction output says Tuffin Ferraby Taylor

Shortages of skilled staff and materials are likely to have contributed to an unexpected drop in construction activity in May, according to construction and property consultancy, Tuffin Ferraby Taylor (TFT).

The UK’s commercial construction activity growth unexpectedly slowed to a seven-month low in May, while the index of housing activity dropped from 63.9 to 62.7, according to Markit Economics. Sub-contractor availability fell at the fastest pace since August 1997, accompanied by contractor’s prices rising at record rates.

However, higher construction output and new work has contributed to a rise in staff levels in the sector for twelve successive months to May.

Liam Drawwater, Head of TFT’s Cost Consultancy Division, said:

“The pause in growth of commercial construction activity is likely to be a result of staff and materials shortages. Although construction is firmly on the mend in the UK, we’re still suffering from the aftershocks of the financial crash of 2008, which resulted in skilled labour being lost from the industry and construction materials manufacturers closing or mothballing plant. The skills shortage has meant contractors have had difficulty keeping pace with rising demand, impacting on construction growth as well as pushing contract prices upwards. It can be expected that employment in the sector will continue to increase in-line with a widening of the recovery in construction.”

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