Employment in the Housebuilding Supply Chain (and beyond)
Every sector can make a case for exemption from the recently announced hikes in employer’s National Insurance contributions, not least housing where, according to the latest figures from Professor Noble Francis, Economics Director of the Construction Products Association, 11,025 firms have so far been lost since the start of 2022.
The house building industry is estimated to support up 834,000 jobs across a range of organisations, operations and occupations in England and Wales (The Economic Footprint of Housebuilding report 2024 – see link below).
According to the Institute for Fiscal Studies, the increases in Employer National Insurance means that employers will have to pay an additional £900 for each employee on median average earnings.
Between 162k and 414k of these jobs are in the already-cash-constrained housebuilding supply chain, which could therefore have to swallow additional costs of between £145m and £372m, and the sector as a whole up to £750m. And of course that’s an ongoing cost not a one off hit
(And that’s before the impact of changes to Business Property relief – the construction sector has the highest number of family businesses in the UK, according to research conducted by Cynergy Bank in 2019, which found that there are 574,275 family firms out of a total of 1,007,500 private construction businesses with two or more family members in management positions.)
The Government is betting on housebuilding’s ability to drive economic growth. Greater employment, wages growth, as well as meeting some hefty new mandatory housebuilding targets. Only the next four and a half years will tell.
Family business data from Pro Building Magazine: https://probuildermag.co.uk/news/over-half-of-construction-firms-are-family-businesses
Full report by Lichfields for the Home Builders Federation can be accessed here: https://www.hbf.co.uk/policy/economic-footprint/
James Scott
Managing Director
