Wales building jobs 'to fall 23%' after 13% output drop

The construction industry is dealing with a decline in private sector investment and public sector cuts

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The number working in the construction industry in Wales will have shrunk by almost a quarter over the decade up to 2017, a trade body has warned.

It follows a 13% fall in output during 2012 following five years of recession, says the Construction Skills Network.

The planned Wylfa B nuclear power station on Anglesey will bring "substantial" growth, although jobs will remain below 100,000.

The Welsh government said it planned to spend £1.1bn on infrastructure works.

Analysis

If ever you needed a graphic illustration of the importance of a major infrastructure project such as a new nuclear power station, then it's in this report.

But much of the work will inevitably be done by specialist contractors, so many building firms will be looking for a growth in house building.

Between 5,000 and 6,000 new homes are currently being built a year in Wales.

The report says there will be a 3% annual growth.

That will be some comfort, but it comes from a low base and depends on a rise in mortgage availability.

The industry is not going to build homes if the first-time buyers are not out there.

The Construction Skills Network says the recession in the industry in Wales reflects the wider job losses in the sector across the UK.

Cuts in both private and public sector spending brought a "perfect storm" leading to serious consequences for the trade, it said, with continuous losses since 2007.

But there is some "cautious optimism" for Wales, with the prospect of modest growth from 2014, with that picking up speed if WylfaB goes ahead from 2016.

It predicts the Welsh construction industry will see output rise at an average rate of 2.7% per year between now and 2017, "substantially above" the 0.8% UK average.

This growth is almost entirely due to work starting on Wylfa B. Without this project, Wales' average annual output growth rate will fall to just 0.6% over the five-year period.

The industry is currently at a low base after the contraction 2012 and employment is expected to decline 1.5% annually - taking 3,560 jobs over the next few years, despite the growth prospects.

The existing Wylfa plant on Anglesey Replacing the nuclear reactor on Anglesey will drive 'substantial' growth in construction, say the report

The job numbers in Wales' construction industry is expected to stabilise from 2015, with some 92,910 in the sector by the end of 2017, but this will be 23% below its 2007 peak.

The private housing sector is expected to grow by an average 3.1%, with jobs in plastering and dry lining set to grow 1.4% annually while surveyor jobs are likely to grow by 1% per year from now until 2017.

Wyn Prichard, Wales director for CITB-ConstructionSkills, said: "Construction found itself at the heart of a 'perfect storm' in 2012 - hit hard by a combination of public sector spending cuts and a lack of investment in the private sector.

ONE COMPANY'S EXPERIENCE

Frank Lawson, of Lawson Construction, a small family civil engineering company in Denbigh, said business was "very tough".

He said: "Are main core work, which is with local authorities on the highways maintenance side, has gone very, very competitive.

"So we've been very proactive in and got in on utilities, so were firing on two fronts and we're quite happy and positive with the steps we've taken.

"We're trying to be as efficient as we can. We're very experienced in our work."

"Given some cautious optimism for Wales there is still a long way to go and it is vital that the Welsh government has recognised the construction industry as critical to the future of Wales' economy.

"As the leading skills body for the construction sector, we look forward to working closely with Welsh government, the Construction Sector Panel, stakeholders and employers to add value during these tough times, bringing planned activity forward quickly, aiding further growth on a local and national level."

Finance Minister Jane Hutt said: "Since last May we have generated an additional investment package of around £1.1bn to fund our infrastructure priorities.

"This is a significant amount of money and shows our determination to stimulate economic growth, create jobs and reduce poverty in Wales.

"Over recent months I have visited schools, hospitals, transport projects and Flying Start schemes across Wales and have seen where additional capital funding has made a real difference to the quality of people's lives.

"What I have also seen is how this money has helped the construction industry to create jobs and support local businesses."

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