The construction press has been quick to pick up on what has been described as a “skills time bomb” in the construction industry. Official figures from the Office for National Statistics have shown that the number of bricklayers claiming job seeker’s allowance have dropped to its lowest level in the past ten years. This has led to pay increasing to bricklayers of around 4%.
The knock-on effect of the skills shortage of bricklayers and other skilled construction trades persons will of course lead to the inevitable increase of projects costs.
Having spent time earlier this week in London speaking to project managers about procuring construction projects in the capital, it seems that the property market is booming in London. I was told of difficulties in getting contractors even to tender for work as their order books are so full. Please let me know if you disagree, but I do not think the rest of the country has reached this level of confidence in work levels yet.
So what should an employer do to ensure that its project runs smoothly?
From speaking to project managers and quantity surveyors, the most important message is to get into dialogue with contractors as soon as possible to ensure they are interested in the project. I have recently heard of a tender going out to 15 contractors with only two responding, an anecdote that took me back to the heady heights of the last boom.
Be realistic of costs and discuss fully with your quantity surveyor. Whilst London does still seem to be a bubble at the moment project wise, prices do seem to be on the increase and the potential skills shortage should not be ignored when pricing a project.
Finally, look at the contractual projection you can obtain. Review the rights under the building contract for the contractor to claim for an extension of time or additional costs. Make sure the drafting in the contract reflects the position agreed between the parties in relation to these.