Construction workforce will take four years to recover

Construction workforce levels could take nearly four years to recover from the downturn, new figures from the Construction Skills Network (CSN) show.

The contraction in construction activity forecast for the next few years is likely to produce an annual reduction in new recruits of 5,000 workers, according to the last CSN forecast based on data from autumn 2008.

The forecasts reveal that the industry would continue to experience a recession until 2011, before entering a period of recovery until 2013.

Year on year data suggested there would be a 3% contraction in 2009, followed by nil growth in output nationally in 2010.

2011 will see a gradual return to low-level growth of 1%, 2% in 2012 and 3% in 2013, the report said.

These figures show an annual output growth over the next five years of 0.5%.

Government investment in public sector projects such as Crossrail and significant station redevelopments such as Reading and Birmingham New Street will support the market in the earlier years of the forecast period. Growth from 2011 will reflect general market recovery as credit conditions ease.

Overall workforce numbers at the end of the five-year cycle are predicted to return to the 2008 levels of around 2.6m.

Mark Farrar, chief executive of Sector Skills Council, ConstructionSkills, said: “This year will be an especially challenging one for the construction industry. However, we expect an incremental recovery culminating in a growth rate of 3% by 2013, largely due to public sector spending and potential market recovery from 2011.”

The data also revealed significant variations in regional performances. Industry in the South West, which does not benefit from public sector spending on projects such as BSF programmes, is expected to contract by 0.2% per year.

London's industry however, is expected to grow by an annual average of 0.8% between 2009 and 2013.

Sandra Lilley, manager of the Construction Skills Network, said: “This is the first time that we have seen such variations in the CSN figures for the regions and nations. The results clearly show that that while activity is not expected to decline across all sectors of the construction industry, this has varying effects across the country and significant challenging times are ahead.”