A recent survey from infrastructure and support services group, AECOM, has revealed that the skills shortage is worsening within London’s construction companies, resulting in some of the capital’s largest building contractors declining half of the bidding opportunities they receive.
The survey revealed that construction costs have increased annually by approximately 10 per cent throughout 2015, with increases of seven per cent being forecasted for 2016, before a fall to 5.5 per cent in 2017.
The research also discovered that some big players in the construction industry are now declining 75 per cent of new business opportunities. This has been attributed to the rocketing costs of labour within the industry throughout London.
As a result of the skills shortage, wages have increased by up to 15 per cent in 2015 for joiners working on London’s prime office and residential space.
Director of Cost Management at AECOM, Brian Smith, said of the survey findings: “The industry is taking a far more strategic approach, targeting schemes that will deliver planned margins.
“Risk appetite amongst contractors is low, with a desire for certainty meaning that projects may be taken on a smaller margin if the return is guaranteed,”
Some construction companies are also being forced to separate themselves from house building in London due to worries about the stability of the market.
AECOM’s survey comes as chancellor George Osborne is campaigning for an increase in house construction, throughout the United Kingdom, over the next few years. The Government has said that it would like to speed up house building in order to ease the problem of housing shortages in the United Kingdom.
According to the National House Building Council, even though there have been similar attempts at creating more homes over the last few years, the amount of new homes registered in the three months to late-September was still 2 per cent lower than that of 2014.