Civil engineering sector in Midlands remains positive but headaches remain, survey shows

Civil engineering firms in the Midlands are generally positive about growth in the coming year but labour shortages and costs are still causing headaches.

According to a workload trend survey by the Civil Engineering Contractors Association’s (CECA), 30% of businesses expected workloads to increase in the next year.

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Meanwhile, 53% said that orders had risen over the last 12 months, while 28% had said that their order books had decreased.

Lorraine Gregory, regional director of CECA Midlands, said: "This survey offers a real insight to the way civil engineering firms have performed over the last 12 months and, crucially, their expectations for the next year.

"There is no doubt that costs are still a big headache and, while the rate of inflation has fallen compared to 2022, businesses have still seen a substantial increase on materials and general running costs.

"On balance, companies believe they will grow over the next year and, of course, that means increasing their headcounts.

"However, as we know, the labour market is already extremely tight and with more firms looking to grow, it is only going to get tighter."

Companies in the sector reported an increase in staff over the past year and, on balance, 43% were forecasting a rise in skilled operatives and 38% were expecting an increase in wider staff employment, the survey showed.

That is contributing to a rise in staffing costs - 6.1% for engineering staff and 4.7% for administrative staff.

Material costs are also rising though the rate of increase has slowed compared to a year ago.

Aggregates, bricks and clay products have all risen by 7% or more, while fabricated steel is also up7% although it was rising by more than 13% a year ago.

The rate of inflation has also dropped on timber and plastic, but it is still relatively high at 7.7% and 6.3% respectively, said CECA.

The rate of increase on fuel prices has also fallen sharply but is still more than 4%.

The survey showed that works like renewable energy works, water and sewerage and railways have grown but preliminary works and motorways and trunk roads have dropped off.

Gregory added: "On the whole, the sector remains positive in the Midlands but it’s vitally important that those issues raised start to be addressed."

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