Economists are warning that the construction sector is facing a tough combination of challenges — a housing market slowdown, weak commercial activity, and rising employer costs — all of which are taking a toll on recruitment.
Directly employed staff numbers are now falling more sharply than those of the self-employed, reversing the pandemic-era trend when many freelancers left the industry.
Noble Francis, economics director at the Construction Products Association, said that the sharp decline in house building since April, coupled with the increase in employers’ National Insurance Contributions, has severely impacted confidence and hiring.
He cautioned: “The longer employment remains at these historically low levels, the greater the risk of a permanent loss of vital skills and experience. Even returning to 2019’s house building output will be extremely challenging, let alone achieving the government’s housing targets.”
Dr David Crosthwaite, chief economist at BCIS, noted that self-employment remains almost 18% below pre-pandemic levels — a reflection of retirements, Brexit impacts, and the lasting effects of COVID-19.
He said: “This loss of flexibility makes it harder for the sector to adapt to changes in demand. With confidence low and projects on hold, the shrinking workforce is both a symptom and a cause of the industry’s fragility.”
Analysts also suggest that the figures may be affected by factors such as the reliability of current Labour Force Survey modelling and the ongoing shift towards modular and offsite construction methods.
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