A sluggish rise in construction job creation

For all the shouts and screams about a surge in construction activity there are few signs in the latest employment figures of a surge in employment.

The figures show industry employment in the third quarter up 0.7% on a year ago. But the number directly employed was actually down on a year ago. The number of self-employed however has jumped 4%.

The rise in the number of self-employed may be a better sign of the growing demand for workers, as firms, particularly house builders, look to rapidly ramp up the numbers of bodies on site.

The more interesting figure was the drop in those unemployed. The number of former construction workers unemployed is down to its lowest level since the summer of 2008 at 120,000.

The figures suggest 21,000 construction workers left the dole queue between June and September and there are 47,000 fewer than a year ago.

This is fantastic news for those who have been suffering without work. But looked at from an industry point of view it highlights the scarcity of resources at the disposal of firms as they gear up for sustained growth.

What the graph showing the change in the “army” of construction workers, those employed and unemployed, illustrates is that the pool of available skills is still in decline. And cumulatively it is down more than 400,000 since 2008.

As it expands the industry will find ways to get around the shortage of skills and materials. Importing labour will almost certainly be part of the approach.

But if the Government wanted to do something smart and long-term – indeed if it just wanted to make inward migration less attractive to align with its immigration policies – it would invest heavily in targeted skills training and mentoring to give struggling youngsters, particularly from tough backgrounds, a chance to build a career.

Having failed to invest in construction during the downturn to preserve jobs and provide valuable infrastructure at a net discount to the nation, this is a second chance for the political establishment to redeem itself.

Brian Green is an independent analyst, commentator and consultant working in construction, housing and property