TURNER & Townsend is urging construction businesses to future-proof their workforces as the sector continues to grapple with skills gaps.
The professional services company’s Spring 2025 UK Construction Market Intelligence report (UKMI) shows tender price inflation (TPI) in the industry is not set to fall, despite construction materials price inflation having eased from record highs.
Turner & Townsend is forecasting TPI rates will remain ‘relatively unchanged’ over the next three years. Real estate inflation from 2026 to 2029 is predicted to stay constant at 3.5%, while infrastructure inflation over the period is expected to remain at 5%.
At the root of this is rising wage growth caused by ‘intense competition’ for a small pool of qualified workers. Five years on from the pandemic, Turner & Townsend revealed construction’s share of the UK labour force is currently at a record low, with sector employment down 3.4% year on year.
Wage rises are said to be outweighing the otherwise disinflationary factors the sector is experiencing. New work fell 2.4% in the quarter according to the Office for National Statistics (ONS) and key material prices are falling. However, newly announced American tariffs on materials like steel may see this trend start to reverse.
In this period of uncertainty, Turner & Townsend is calling on firms to focus on consolidating and improving the skills they have, while laying the groundwork for future talent. This includes teaching new skills for the future to existing workforces, and retraining employees into specialisms that better match current demand, such as digital skills and expertise in modern methods of construction. More must also be done to improve retention and ensure talent remains in the construction sector.
James Darrie, director and strategic lead for Scotland at Turner & Townsend, said, “From the Planning & Infrastructure Bill to forthcoming industrial strategies, recent announcements highlight the essential role of the construction sector in achieving Scotland’s economic and social objectives. However, to succeed we must overcome several challenges that could hinder our progress.
“While we should stay alert to US tariffs, the uncertainty surrounding their evolution and global impact shouldn’t divert our focus from issues within our control, especially the critical workforce problem.
“Five years after the Covid-19 disruption, our sector continues to struggle with declining employment. It’s crucial that we rethink our approach to attracting talent. By embracing a wide range of disciplines, backgrounds, and skills, we can build a modern, digitally confident, and innovative construction workforce to secure Scotland’s future.”
