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Construction sees exodus of foreign workers

March 2021

A recent article by Jack Woodfield on says that post-Brexit construction could be impacted by the departure of skilled EU workers, and that labour costs could rise.

The Office for Budget Responsibility (OBR) has warned that thousands of overseas workers who have left the UK in the past year will not return, and post-Brexit immigration rules could put them off coming back.

This has prompted warnings from businesses, including those within construction, that this will put the government's recovery from the pandemic at risk, and jeopardise its aim to build 300,000 homes per year.

A depleted workforce is a major post-Brexit concern, following many EU workers choosing to leave before the end of the transition period in December, which was exacerbated by the pandemic.

The UK lost a quarter of its EU-born construction workforce between January 2020 and January 2021, and this 28% drop was greater than the 7% fall in total employment in construction, according to the Construction Products Association.

Rico Wojtulewicz, head of housing and planning policy at the National Federation of Builders, said the exodus poses a “real danger that we’re going to have a major skill shortage”.

He added: “We need 300,000 homes a year, but we’re building 180,000 new ones, or 220,000 if you count conversions, so we are well away from that target.”

The UK lost a quarter of its EU-born construction workforce between January 2020 and January 2021   However, in February Lords minister Susan Williams suggested the government could be open to reviewing immigration policy for construction workers after the Covid-19 pandemic.

She said the list of occupations which are allowed easier access into the UK could be reviewed after “assessing how the UK labour market develops post-Covid-19”.

Labour Costs Could Rise

Another consequence of a skills shortage is that project costs could be driven up if demand for labour exceeds supply.

Employers are facing uncertainty over the future of their workforces. Only one in 10 construction employers surveyed by the Construction Industry Training Board (CITB) in January said they understood the new points-based immigration system, while 72% of employers believe the end of free movement will impact the industry's ability to secure a skilled workforce.

Employers also have concerns over the associated costs and making sure they are able to support EU-born staff through the process of applying to remain, which could affect the ability to deliver on targets.

Concerns have also persisted over the construction materials shortage.  Around £10 billion of building materials are imported to the UK every year, and the trade deal ensured the continued importation of building materials from the EU without additional tariffs. This helped to mitigated the potential for the availability of materials to decline.

The construction industry is experiencing challenges with certain building materials, including timber and plaster shortages, which can be traced back to the first lockdown.

The availability of supplies will also be influenced by the length of supply chains, which remain strained, although not entirely due to Brexit. There has reportedly been a slowdown in the production from some factories in the EU because of Covid-19.  This disruption could cause delays to projects across the country, and concerns remain over the availability of some building materials.

Roughly 60% of imported materials used in UK construction projects comes from the EU, according to the Construction Leadership Council, and increased congestion reported at UK ports since the start of the year has caused delays.



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