Employment in the building industry drops to a 24-year low

According to the latest government data, the number of construction workers fell by 1.3% in the third quarter to 2.05 million, indicating a 15% decline in capacity from the peak observed just before the Covid pandemic. This means a reduction of 367,000 jobs. But what are the reasons for this situation, and how might it affect the UK construction industry?

The main source: Construction employment sinks to 24-year low

The reason for that situation

Economists warn that a combination of the housing market downturn, weak commercial activity, and higher employer costs has heavily impacted hiring. The number of directly employed workers is now declining faster than that of the self-employed, reversing the trend seen during the pandemic when thousands of freelancers left the industry. Other external factors may also influence these figures, including the accuracy of the current Labour Force Survey modelling and the industry’s shift toward greater use of modular and off-site work.
Dr. David Crosthwaite, chief economist at BCIS, stated that the level of self-employment has fallen by almost 18% compared to 2019 levels, reflecting retirements, Brexit, and the effects of the pandemic.

How does the employment drop influence the UK building industry?

The decline in the number of workers in construction will have negative consequences for both the industry itself and the UK economy in general.
Noble Francis, economics director at the Construction Products Association, said that the slowdown in housing construction since April and the increase in employers’ National Insurance contributions have affected confidence and hiring.
He warned: “The longer employment remains at these historically low levels, the greater the ongoing loss of skills and experience. Even returning to 2019 housing construction levels will be incredibly difficult, let alone reaching the government’s targets.”
Fencyx, as one of the leaders in the UK building industry, is concerned about this situation. We hope that the government will take all necessary actions, because otherwise, the construction industry may face serious challenges.

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