As a key indicator for business confidence, which the Institute of Directors says dropped in August, the boss of hardware giant Screwfix has delivered a bleak forecast of a skills shortage by 2030 that could see a shortfall of 250,000 trained people in the UK – with paralysing implications for the economy and housebuilding.

As the August IoD findings sugggest flagging business confidence around job creation (in contrast to positivity at a three-year high in the wake of the general election), John Mewett, CEO of Screwfix, has revealed how the state of advance bookings for his customers should be read as a red flag for underlying trends.

The implications of any employment law changes and tax rises may be early days, Mr Mewett told Radio 4, in terms of hitting confidence, but he added: "Our customers are still telling us they're very busy, 75% of our tradespeople are booked up for the next six months."

He said this pointed to skills and labour shortages already identified by the new government, and warned that if it wanted to meet its hope of building 1.5m new homes, the growing shortage of professional tradespeople was a "worrying problem".

He said: "We are on course for a shortage of 250,000 tradespeople by 2030."

Given insufficient numbers of young people entering building trades to offset the number who are retiring, most householders were well aware how difficult it is to find local tradespeople.

But the effect of the shortage is also impacting tradespeople themselves, he warned: "If you're a plumber doing a bathroom, you need a tiler or an electrician and they are telling us this is the biggest problem."

He added that 92% of tradespeople interacting with Screwfix don't think schools are doing enough to promote careers in the sector.

Screwfix's insight today carries huge weight: as part of the Kingfisher Group, whose portfolio includes B&Q and Tradepoint, the retailer has 1,726 stores in the UK, with Screwfix trade and public depots in Stroud, Cam, Cirencester, Tewkesbury, Bourton-on-the-Water, as well as three more across Gloucester and Cheltenham.

Asked if the construction and trades sectors are doing enough to engage young people, Mr Mewett said "a trade career versus going to university is a great opportunity".

Screwfix runs an annual trade apprentice competition, he added, citing 2023 winner Katie Jones, a straight-A student from Lancashire, who had been advised to go straight to university but who is now a successful heating and plumbing engineer.

"It's a great career for young people," he added.

Changes to capital gains tax could also trigger problems in the building sector, he said, adding: "we need to wait and see, but anything that hinders the opportunity to build new homes and create new investments will not be great."

The IoD Directors' Economic Confidence Index, which was issued yesterday and which measures business leader optimism in prospects for the UK economy, fell back to minus 12 in August, following a three-year high of plus 7 in July 2024. Business leader confidence in their own organisations also fell from plus 36 in July to plus 23 in August.

Anna Leach, Chief Economist at the Institute of Directors, said: "It's disappointing to see last month's welcome uptick in business leader confidence snuffed out over the summer. It is notable that the sharpest drops in our economic measures are in investment and headcount expectations, whilst other measures have moved to a lesser degree, albeit in a likewise negative direction. The newsflow in recent weeks on employment rights and Autumn tax rises has dented confidence in the environment for business in the UK.

"As we head into a busy Autumn, we are calling on the government to take time to get policy design right for the long-term, and deliver the stable tax and policy framework needed to drive business confidence and investment. 

"Further clarity on the industrial strategy and the business tax roadmap, in conjunction with more progress in engaging with business on workers' rights, would be welcome."