The construction industry is facing critical challenges due to a shortage of skilled workers and delays in project planning. This situation is particularly concerning as pension funds are showing a keen interest in investing in infrastructure projects. Randstad's analysis indicates a substantial demand for 500,000 individuals to meet the needs of current and upcoming projects like the Lower Thames Crossing, National Grid expansion, and Stonehenge Tunnel.
Simon Harris, Construction Head at Randstad, emphasizes the industry's strained capacity, which has been further exacerbated by a talent drain from the housebuilding sectors. Over the years, the construction labor force has seen a decline of 465,000 workers, leading to a significant shortage of labor despite an increasing demand, especially in areas like green energy initiatives. Harris expresses concerns about an impending "brutal labor shortage" as infrastructure demands grow, with projects such as HS2 and Sizewell C competing for a limited pool of skilled workers.
On the other hand, pension fund leaders are signaling their intentions to increase investments in British infrastructure, with a majority planning to boost spending. A survey by GLIL Infrastructure highlights that 70% of respondents prioritize energy transition, with a focus on investments in battery storage, hydrogen, and carbon capture technologies. Ted Frith, COO at GLIL, stresses the importance of patient capital in financing infrastructure projects crucial for the UK's transition to a sustainable, net-zero economy. However, he raises concerns about the UK's investment attractiveness, pointing out that prolonged planning delays are impeding infrastructure upgrades and hindering investor confidence in the market.
Despite pension funds showing readiness to invest, Frith underscores the urgency in addressing planning inefficiencies to smoothen project delivery and enhance investor confidence in the UK infrastructure sector. The industry is at a critical juncture where overcoming the skills shortage and improving planning processes are essential to meet the escalating demands for infrastructure projects in the country.