Building jobs and the recovery are critical to the UK’s recovery, a leading economic think tank has warned.
In its annual report to the Treasury, the CBI found the country is at risk of losing over $1tn to an expected surge in construction activity.
The report also warned that the number of people employed in the construction sector is expected to increase by 20 per cent over the next five years, but said this was not enough to help the economy grow faster than the Bank of England’s target of 2 per cent.
In addition, the report said it is unlikely that new jobs will be created for years, and said the government should consider boosting public investment.
A report released earlier this month by the Institute of Directors (IoD) said that in the long term the UK could become a “building nation” with the construction industry providing around a third of the country’s GDP.
“There is a clear need for more public investment, particularly in infrastructure,” IoD economist Simon Pryce said.
“A more diversified, more productive and less expensive public sector would be welcome.
But it is also essential that the government continues to invest in the infrastructure it has already funded and which is already in place.”
The report warned that more than half of the UK population is unemployed and that a shortage of workers is threatening to make the country a “build it or pay for it” society.
The CBI’s report also found that while there is a large number of apprenticeships available, there are still only around 10,000 in the UK.
There are also concerns that there is not enough skilled construction workers in the country, and that the lack of skilled workers has allowed firms to set prices artificially higher, and in some cases undercut their competitors.
The IoD said that the problem could be exacerbated if the government did not introduce a new apprenticeship levy.
“If we do not introduce this levy we risk seeing a further loss of skilled labour from the construction and construction service sector,” Mr Pryce added.
“We know that the apprenticeship programme is highly valued by employers, but we also know that employers are not willing to pay higher prices if they can save the jobs of those who are leaving.”
In the report, the IoD also said that there were several “unmet demand” areas in the sector, and recommended that the UK “continue to invest” in these areas.
The latest figures from the Office for National Statistics (ONS) showed the construction workforce is forecast to grow by a further 1.1 per cent in 2017, and is forecast at an annual growth rate of 4.1%.
“A stronger construction sector can support jobs and growth in the economy,” said Ido Deane, vice president of research and analysis at the CBI.
“But we also need to do more to stimulate growth in these other areas, including in the manufacturing and services sectors.”