Order books fill but skills shortages worry contractors 

The latest sector-wide Building Engineering Business Survey, sponsored by Scolmore, shows that, while turnover is predicted to grow through the rest of 2021, ongoing materials and labour shortages are likely to worsen.

The survey, which includes data from industry trade bodies ECA, BESA, SELECT and SNIPEF, shows that specialist contractors are particularly concerned about lack of skilled staff able to meet growing demand for the sector’s services.

There are shortages of skilled labour in all specialist sectors, and this is pushing up labour costs. As a result, 26% of survey respondents said they would hire fewer agency workers and subcontractors in Q3 compared with Q2. Just under a quarter (23%) said they would hire fewer apprentices despite the urgent need to increase the flow of new skilled people into the industry.

Nearly two thirds (61%) said they expect the ongoing shortages of materials and equipment to deteriorate as the year goes on (Q3 vs Q2). Individual respondents highlighted the lack, and rising prices, of cables, cable trays and containment, as well as growing lead times and delays in deliveries.

However, more than eight in 10 (85%) of respondents expect their turnover to remain the same or increase in Q3 2021, compared with Q2. Almost nine in 10 (87%) expect turnover to stay the same or increase between now and the end of 2021.

Rob Driscoll, ECA Director of Legal and Business, says: “While businesses, particularly SMEs, should be commended for their tenacity and resilience in the face of a challenging commercial environment, the clock is ticking for labour and materials.

“A backlog of jobs may appear good on paper, but if the ongoing shortages are not resolved soon, in practical terms, this will mean a further squeeze on costs and margins for contractors who are at risk of tendering for today and buying negative cash-flow problems for tomorrow.”

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