Location location: heading South?

Many people say that the South is doing well, but at the expense of the north – with big projects such as T5, Crossrail, LTGW, the Shard and the Gherkin all winning headlines and commanding large numbers of the available workforce.

Future projects, such as the cluster of new skyscraper towers planned for the Ciity in London including Heron Tower, Leadenhall and Broadgate Tower, ensure that the South will remain a hub of building activity for many years to come.

Danny Stupple, consultant at recruitment consultancy Beresford Blake Thomas’ (BBT) London office, believes that this activity will attract workers down from the North. “On the client side we’re certainly seeing some movement down from the North to the South. This is based on project specific reasons, for instance obviously T5, but also T2, plus the current work going on at Gatwick,” he says.

“Big projects certainly do dominate the market in ways which smaller ones don’t, however their effect on the choices of where workers go to work aren’t taken in isolation – i.e. there are many other factors which are just as important as the nature of the job itself,” adds Stupple. “An example of this is with T5 where while admittedly I have placed staff at the terminal, there are also a great many who decline it because of the nature of the work itself, its support infrastructure, and, most importantly, its location.”

However, it will be London 2012 that will have the biggest impact on the market. Construction Skills, the body responsible for recruiting and training the UK’s construction workforce, recently published analysis showing that just managing the output for London 2012 will create approximately 33,500 additional jobs over the next six years.

This figure will include normal construction staff, plus more exotic and specialist workers who will need to work on the complex mix of stadia, infrastructure and residential developments. The question is whether there will be major increases in salaries as a result of the projects attracting the best workers, and what state will that leave the large number of projects contracted in the north over the next six years?

The view is supported by CIOB deputy chief executive, Michael Brown who says: “The Olympic Games, as a flagship project, will probably be able to attract the people that it needs. It’s what’s going on around it that could be hit very badly. Crossrail is the big unknown – while the Olympic park is likely to come in around £3.4bn, the Crossrail project is expected to cost £16bn – more than four times as much.”

Yet, the flow certainly isn’t all one way. Indeed, many areas and sectors north of London are doing better than their Southern counterparts. Evidence of this can be seen in April’s Federation of Master Builders (FMB) report, where both Scotland and the North east reported the country’s highest growth in workloads.

“Here in Scotland we have noticed a large influx of people coming up north in search of construction and building employment,” says Sameena Sarwar, consultant at BBT’s Glasgow office. “There are both southerners moving up North and Scots returning to their homeland, having worked away for a while. The main attraction to Scotland seems to be the lower living costs - you can still have an excellent quality of life here, but at a significantly lower cost than in the south. There is also the issue of transport - it is much easier to get about here and there is not the issue of a long commute on the crowded Tube.”

Sarwar continues: “There are some major building projects in progress here - the Glasgow Bridge, plus the Clyde waterfront being good examples. There are also a number of large PPP and PFI projects driving such staffing change, for instance the Scottish Water Framework.”

The final conclusion is of course mixed – with both the North and the South doing comparatively well. However, if skills shortages are also brought into the mix, then the issue becomes much more complicated. And it is only when the big projects are fully up and running that their geographical effect on the labour market will become clear.