The past few years have seen many challenges for the construction industry. Between the pandemic and Brexit there has been a huge amount of disruption. We’ve discussed the ongoing materials shortage in the industry, which is causing delays and stoppages in projects. Brexit has caused employment changes and resulted in the loss of high numbers of EU workers. Then we have the same high prices that are affecting other industries due to the current cost of living crisis and the increased cost of fuel and energy that’s affecting everyone.
What challenges is the construction industry facing in 2023?
Cost of living and inflation means that there is likely to be an expectation of higher wages for current and potential employees. Companies will need to include this in projected budgets for 2023 to be competitive. They will also need to budget for training and to have a competitive benefits package.
Skills shortage The biggest demographic in employment is the over 60’s, and this demographic is starting to retire. The under the 30’s are the fastest decreasing demographic. The rate of retirement is higher than the rate of employment. Between this and the loss of a huge number of the workforce due to Brexit, the industry is in trouble. This will lead to increased competition for staff which will also result in higher wages for staff.
Competition from other industries
Other industries are facing the same issues as construction, lack of qualified staff and shortage of materials. This is going to lead to increased competition for both. Construction isn’t the only industry to use materials like wood and plastics. They aren’t the only industry that needs experienced and qualified workers.
The war in Ukraine has caused major issues for several industries, not least construction. Russia is a huge supplier of copper, and Ukraine is a major supplier of metal and other raw materials. With no sign of the war ending, we can expect to continue to see shortages and price increases in these materials. There is also the issue of extreme weather in other parts of the world. Hurricanes, earthquakes, and other natural disasters cause major disruption. They come with death and injury wiping out your workforce and devasting resources. Related to that, there are also worldwide carbon net zero targets which will bring further challenges.
The next few years might be among the most difficult the industry has faced. War, weather, labour and more will continue to affect everything from the availability of materials to the inflation rate. The war in Ukraine is affecting the supply of materials as well as the cost of fuel and is showing no sign of stopping. Inflation and the cost of living will also affect the industry into next year. However, it’s not all bad news. The value of projects is predicted to rise and growth in the industry is predicted, all be it a modest growth of 10% over the next two years. If you’d like to talk to our experts about how we can help you navigate and prepare for challenges in the future, don’t hesitate to get in touch.