Construction employment to fall by a quarter in London over 24 years.
Last month we looked at GLA Economics research on employment projections for London up to the year 2031. Across London, employment is predicted to project around three-quarters of a million by 2031 based on 2007 levels.
However, not all sectors are predicted to grow (in terms of employment). Manufacturing, construction, wholesale, transport and communications and public admin are projected to decline between 2007 and 2031. In many central London Connexions boroughs a third or more of jobseekers have construction as their chosen industry, so it is worth looking at projections for this sector in a little more detail.
London Construction Employment Projections (000s)
In 2007 around 1 in 20 working Londoners were employed in the construction industry, by 2031 this is predicted to fall to 1 in 30. The recent GLA report does not look into why employment in specific sectors is projected to increase or decrease in any detail. However, looking back to the GLA’s Laying the foundations, London’s construction industry report in 2006 gives some answers.
In 2006 around three-fifths of construction activity in London was new build, the remainder being repairs and maintenance of existing structures. So the virtual freeze on new build projects caused by the recession has obvious short-term effects.
The growth in construction of offices accounted for most of the growth in construction in London from the mid 1990s to the early 2000s. Few would predict such demand for new business space in the near future. Much of the attention of the construction industry in London may be directed towards transport projects, so the future of large scale infrastructure projects will have a big impact on construction employment in London.
So, another construction boom like that of the late 1990s/early 2000s is not predicted. In addition construction businesses in London find it easier to fill vacancies and attract workers from outside the capital. Construction workers in London have higher earnings than those across Great Britain as a whole and construction businesses in London have a lower share of unfilled or hard-to-fill vacancies than outside the capital.
It must be said that predicting future demand for construction is risky. The market for construction is influenced by the state of the property market as well as national and local government priorities. Even if construction in London does see the employment decrease predicted it does not mean it is a sector to be avoided - there will still be many good opportunities. However, some of the commonly held perceptions about the construction workforce (for example, constant boom and high demand) are increasingly at odds with the reality.
Trevor Bottomley
Employment & Labour Market Adviser
Central London Connexions
December 2009