Confidence is building up again in the North East construction industry

The tide appears to have turned for the construction industry, sector experts in the North East say

Building work on the Stephenson Quarter, Newcastle
Building work on the Stephenson Quarter, Newcastle

It was the sector dealt the biggest body blow during the recession, with output falling by 10% and the industry workforce being slashed as a result by 20%.

Now, however, the tide has almost certainly turned for the construction sector.

Proof is evident in activity unfolding on sites across the North East – within city centres and further afield –with the number of student accommodation projects, hotel developments and healthcare, education and housing schemes.

That activity will soon ramp up, as a number of major, multi-million-pound projects get under way in 2015.

Such growth across the sector within the North East is set to create up to 17,500 new jobs over the next five years.

That’s according to a forecast from the Construction Industry Training Board (CITB), with projects across a range of sectors triggering the creation of some 3,510 jobs each year from now until 2019.

The report – the annual survey by the Construction Skills Network (CSN) – suggests the region could see growth of 2.3% over the period, with the employment boost helping to fuel a Northern economic powerhouse.

The CITB said the commercial and industrial sectors were important drivers in the region, and that infrastructure was predicted to be the highest-performing sector, with an annual average expansion of 5.8% – one of the highest growth rates in the UK and much higher than the national average of 2.4%.

The prediction comes amid a growing list of projects, including the 780 construction jobs set to be created at the £30m industrial scheme Kingsway, in Gateshead, being spearheaded by UK Land Estates; the £100m makeover of Newgate Street in Newcastle; and the £100m Swan Hunter shipyard redevelopment.

And that’s all before we start talking about the rising need to build new homes – a key factor in expansion at number of companies.

Tom Yeoman / Red Wellies Photography Craig Knowles of Southdale
Craig Knowles of Southdale

Craig Knowles, North East operations director for construction and development specialist Southdale, said: “Affordable house-building can be at the heart of meaningful and sustainable job creation in the coming years.

“There is a well-identified need for more homes to be built, not only here in the North East, but across the country.

“When the recession hit, construction suffered and we saw large numbers of good, experienced people leave the industry.

“Some retrained and went into other careers, others moved abroad for work.

“We can’t expect these people to come back, but there is a real silver lining in that for employment, because we can now create opportunities for new people to come into the industry and learn the skills that will set them up for a rewarding career. Public-funded housebuilding, such as that which we conduct on behalf of landlords here in the North East, rightly comes with encouragement to create local jobs and skills, and this is something we thrive on.

“At Southdale, we are aiming to create around 50 apprenticeships across the North of England in 2015, double our figure from last year.

“On top of this, we want to use as much local labour as possible, both directly and through sub-contractors, again creating opportunities in the jobs market.”

There has also been a raft of other announcements that has seen key North East employers unveil recruitment plans, as part of a drive to meet demand for affordable housing.

Barratt Developments North East will swell the ranks by 600 this year alone as it strives to meet targets, while Alnwick-based Cussins is taking on some 500 new employees.

Newcastle based Surgo Construction and Thompsons of Prudhoe also envisage head-count expansion on the back of successful procurements.

Meanwhile, a newcomer is also on the scene, in the shape of social housing contractor Forrest which is expanding into the region – a move set to create up to 80 new jobs – after being appointed by Anchor under a new long-term agreement for planned works.

A North East building site
A North East building site

Peter Davison, managing director of Billingham-based building and construction company RPD Builders, said the rising confidence is palpable.

He added: “Falling inflation and an economy that is growing is giving many home-owners more in terms of disposable income.

“Lower unemployment has meant that there is a growing demand for larger-scale home improvement projects.

“People now have the confidence to invest in their homes in a way we have not seen for several years.

“Jobs will undoubtedly be created in the building sector if confidence continues to grow. This is very encouraging for skilled and experienced tradesmen and for young people looking for an apprenticeship in one of the key trades such as bricklaying or plumbing.”

Training the next generation of skilled workers is dealt with in-house by many employers, including Surgo Construction, but many are struggling to find those with necessary skills who are needed right now.

Surgo director Jeff Alexander said: “We’ve taken on three contract managers, four site managers and about half a dozen labourers and bricklayers, which is definitely a move in the right direction.

“If we are as successful in procurement as we have been we’ll be looking to recruit more this year too.

“But it’s getting more difficult – there is a lot of competition for people now.”

Despite the positive forecast, and pledges to recruit apprentices, the CITB and Federation of Master Builders warns that the skills shortage as whole continues to loom large and more action needs to be taken at top level.

Steve Housden, CITB sector strategy manager for the North East, said: “The construction industry is making a strong comeback.

“Worryingly, though, construction is facing a skills gap, with projects potentially held back due to a lack of skilled workers.

“That’s why CITB is working with industry to attract the next generation of workers and encourage skilled tradespeople who left the industry in the recession to return.

“This positive forecast shows that now is the right time to start, or return, to a rewarding career in construction.”

Steve Housden, CITB Sector Strategy Manager for the North East
Steve Housden, CITB Sector Strategy Manager for the North East

Brian Berry, chief executive of the FMB, agreed.

He said: “Concerns over diminished workloads have been replaced by concerns over skills shortages.

“This time last year, only 27% of firms were struggling to recruit bricklayers – that figure now stands at a sizeable 42%.

“For carpenters and joiners, the figure has nearly doubled with 23% of firms reporting issues in Q4 2013 and 44% of firms now saying these tradespeople are hard to come by.

“We’re also seeing a rising and significant shortage of roofers, plasterers and site managers.

“The skills time-bomb has arisen for a number of reasons.

“Around 400,000 construction workers have left the industry since the downturn hit in 2007 and many will never return.

“If you combine this with an increase in workloads as the economy recovers, all the signs point to the skills shortage getting worse before it gets better.”

Berry concluded: “The FMB is working hard to help address this skills shortage but the Government must also play its part.

“If ministers could do one thing to help address the problem in the medium term, it should be to review its proposed apprenticeship funding reforms, which our members tell us will prevent them from being able to train apprentices.

“In the midst of a skills crisis, it’s the last thing the construction industry needs.”

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