The traditional construction sector suffers from systemic challenges which significantly and negatively affect its capacity to supply the homes of the future that the West Midlands will need.
Data from the Office of National Statistics confirms that the economically active workforce has reduced by 11% since 2019, a combination of demographics, the pandemic, migration patterns and insufficient new talent replenishment. One third of the workforce is now aged over 50 and the average age is increasing, yet in many physically intense trades most workers plan to retire at 55-60 years old and not at the state retirement age. The Construction Industry Training Board (CITB) in its most recent survey estimated that 25,000 extra construction workers are needed in the West Midlands in the next 4 years, yet societal change means a smaller talent pool is choosing construction as a career.
Amplifying the workforce challenge is anecdotal evidence that productivity has declined further since the pandemic from what was already a low base. This is now driving wage inflation and reducing relative output, creating resource scarcity which threatens viability of future projects. The combination of regulatory change relating to both carbon and safety, with a shrinking construction workforce and shortages of key traditional skills, creates an unsustainable situation.
We therefore have a national and regional productivity and resource security risk which requires immediate action to safeguard our ability to build more and better-quality homes in the future with the growing threat of a resource constrained workforce. The status quo is not an option. Homes for the Future is therefore not just an environmental necessity, but an economic one.
The pivot towards more advanced methods for building homes has been slow to emerge over the last few years despite Government incentivisation and mandate through programmes such as the Affordable Homes Programme.
In the past eighteen months, however, the combination of a growing realisation of the extent of workforce erosion and the likely implications of the Future Homes Standard is starting to motivate major national housebuilders to review their construction strategies. Several major housebuilders have embarked on building factories to produce a proportion of their new homes to safeguard additional capacity despite workforce challenges, driven by recognition of the twin challenges of resource scarcity and carbon reduction.
These businesses are formally linking AMC and MMC with the ability to deliver higher performing homes in bigger numbers. While the fact that major housebuilders are now comfortable with new methods shows that past concerns about robustness and access to mortgage finance have been addressed.