Weaker demand trends in construction staff

Growth of vacancies for permanent construction staff eased in November, while demand for temporary staff fell slightly.
The latest Report on Jobs, published today by KPMG and the REC, highlighted weaker demand trends in construction than those for all types of workers.

Dropping to 54.9 in November, its lowest reading since May, the index measuring demand for permanent construction staff still pointed to a solid pace of expansion.

Nevertheless, the index was below that for all types of workers (61.3) and placed the sector in seventh place out of nine in the demand for permanent staff league table.

The equivalent index for temporary construction vacancies also fell, and was at a 30-month low of 49.4 in November. Although indicative of a marginal decline overall, the latest reading remained below the UK average for all types of temp staff (58.9).

The construction sector was at the bottom of the demand for temp staff rankings.

Richard Threlfall, Head of Infrastructure, Building and Construction, at KPMG, said: “This latest sign of falling demand for construction workers is consistent with recent evidence of softening growth in the sector, in particular last week’s Markit/CIPS UK Construction Purchasing Managers’ Index, which showed a slow-down in growth in all construction subsectors.

“It also supports the recent decision of the Construction Products Association to reduce its 2015 and 2016 construction output forecasts.

“It is particularly frustrating because underlying demand for the sector remains strong, particularly in civils and commercial, but continues to be suppressed by rising wage costs, which are causing clients to delay and re-scope schemes.

“Wages in the construction sector in November rose yet again, with weekly earnings increasing by 6%, double the average pay rise awarded across the rest of the economy. The industry ought by now to be motoring on full throttle but it seems the road to growth is full of hairpin bends.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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