Infrastructure Projects Face Labor Shortage and Planning Delays
Despite increased interest from pension funds to invest in infrastructure projects, the sector faces significant challenges due to a dire shortage of construction skills and persistent planning delays.
Randstad's analysis reveals a pressing need to recruit 500,000 individuals to meet the demand for ongoing large-scale projects and upcoming schemes. These projects include the Lower Thames Crossing, National Grid expansion, and Stonehenge Tunnel.
Simon Harris, Construction Head at Randstad, highlights the industry's stretched capacity, further exacerbated by talent drain from housebuilding sectors. Since 2008, the construction labor force has shrunk by 465,000 workers, creating a stark labor shortage amidst escalating demand, particularly for green energy initiatives.
Harris warns of a looming "brutal labor shortage" as infrastructure demands surge, with projects like HS2 and Sizewell C competing for skilled workers.
Meanwhile, pension fund leaders signal intentions to boost investment in British infrastructure, with nearly two-thirds planning increased spending. GLIL Infrastructure's survey highlights energy transition as a priority for 70% of respondents, citing investments in battery storage, hydrogen, and carbon capture.
Ted Frith, COO at GLIL, underscores the pivotal role of patient capital in financing infrastructure projects essential for the UK's transition to a sustainable, net-zero economy. However, he flags concerns about the UK's attractiveness for investment, citing prolonged planning delays hindering infrastructure upgrades.
While pension funds express readiness to allocate capital, Frith emphasizes the urgent need to address planning inefficiencies to facilitate smoother project delivery and bolster investor confidence in the UK infrastructure market.