The year’s first State of Trade Survey by Build UK has shown that labour supply continues to be a cause for concern with members reporting widespread difficulties in recruiting supervisors, managerial, professional and technical staff along with bricklayers and cladders.

Undertaken by Glenigan, the poll shows that the main reasons stated for the difficulties in filling vacancies were the low number of applicants with their required skills (53 per cent), a lack of required experience (53 per cent) and a lack of qualifications (48 per cent).

Whilst output rose only slightly, contractors reported a strengthening in enquiries during the quarter. Costs for contractors continue to rise as 39 per cent reported a rise in all building costs over the past quarter and almost two-thirds of contractors reported a rise over the past year. The cost of labour has also risen with 43 per cent reporting an increase in labour costs compared to the previous quarter, and almost two thirds reporting that their labour costs were higher than a year ago.

Even so, overall contractors remain positive about their future prospects with 27 per cent expecting workloads to rise during the next quarter. Industrial and commercial sectors are identified as particular growth areas, and the majority (52 per cent) of contractors expect workloads to rise over the next 12 months. However, 26 per cent expect their work volumes to decline, compared to just 9 per cent last quarter, which suggests that the overall pace of industry growth will be slower than previously anticipated.

In terms of payment, half of contractors reported waiting at least 46 days on average, despite only 20 per cent having average contract terms of 46 days or more.

Build UK chief executive, Suzannah Nichol MBE, said: “There continue to be mixed messages in terms of growth, however industry intelligence shows increasing levels of activity over the last quarter. Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels. Build UK is leading the way on the war for talent with its members opening their projects up to the public during Open Doors week in June 2016 to attract the brightest talent to projects at both a local and national level.”