This is incredibly annoying. I have downloaded and followed readme file for building my editor via xcode and after countless attempts of at least an hour an attempt I continue to get this error
Thanks for report! We already have a bug report in our system for this issue (UE-6776), and I’ll let you know here when I see an update on it. For now, you can work around this by running editor that was built (in Engine > Binaries > Mac > UE4Editor-Mac-Debug). This will run and finish compiling all shaders. Once this has finished, you can build and run in Xcode as normal.