Growth among
construction SMEs slowed in most parts of the UK in the third quarter of this
year, according to the Federation of Master Builders (FMB).
Key results from the
FMB’s latest State
of Trade Survey which is the only quarterly assessment of the UK-wide SME
construction sector, include:
- Q3 2017 was the 18th consecutive quarter of
positive growth which means that the UK’s construction SME sector has been
growing for four and a half years (ie since Q2 2013);
- 41% of construction SMEs
predict rising workloads in the coming three months, down from 48% in the
previous quarter;
- 82% of builders believe that
material prices will rise in the next six months;
- 61% of construction SMEs are
struggling to hire carpenters and joiners and 59% are struggling to hire
bricklayers;
- Over half (58%) of
construction SMEs expect salaries and wages to increase in the next six
months.
Brian Berry, Chief
Executive of the FMB, said: “Material price hikes and skills shortages are
putting the brakes on growth among the UK’s small building firms.
"Now that the
General Election is well and truly behind us, it was our hope that consumer
confidence would spring back and spur growth among small building firms in the
third quarter of this year. However, our latest research shows that rising
costs are dampening the performance of construction SMEs.
"The spike in
salaries is a direct result of the ever-worsening skills shortage in our
sector. It’s a simple consequence of supply and demand – construction workers
know their worth and given the scarcity of skilled tradespeople, these
individuals are understandably demanding higher wages from their employers.
Indeed, nearly two thirds of construction SMEs are struggling to hire
carpenters and joiners which has now surpassed bricklayers as the trade in
shortest supply.
“Although the SME
construction sector is still growing, the Government needs to keep a watchful
eye on this slowdown in growth. Construction is a strategic industry and
without it, the Government will be unable to build the homes, schools,
hospitals, roads and railways it needs.
"With Brexit on
the horizon, the Government must keep the needs of the construction industry in
mind as it negotiates the UK’s departure from the EU. In particular, Ministers
must work closely with the sector to develop a post-Brexit immigration system
that works for construction and a transition period that allows us to gradually
reduce our reliance on EU migrant workers.
"On the
domestic front, we are urging the Housing Minister to turbo-charge the SME
house building sector by fully implementing the proposals in the Government’s
Housing White Paper which was published back in February. Eight months on, our
sector is crying out for the very sensible proposals aimed at removing barriers
to SMEs so we can once again get Britain building en masse.”
