The workloads of small
and medium-sized (SME) construction firms grew slightly in the first three
months of this year despite record numbers of builders reporting rising
material prices, 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:
• Construction SME
workloads remained positive in Q1 2018 but grew at a slower rate than in Q4
2017;
• The construction SME
sector has now enjoyed five years of consecutive growth;
• More construction
SMEs predict rising workloads in the coming three months, up from 38% in the
previous quarter to 49% in Q1 2018;
• 90% of builders
reported increasing material prices in Q1 2018, this is the highest reading on
record;
• More than half (58%)
of construction SMEs are struggling to hire bricklayers and 55% are struggling
to hire carpenters and joiners;
• Two-thirds (66%) of
construction SMEs expect salaries and wages to increase during the next six
months, up from 62% in the previous quarter.
Brian Berry, Chief Executive of the FMB, said: “Workloads for builders continued to grow in
the first quarter of 2018 despite the ‘Beast from the East’ wreaking havoc
across the UK’s construction sites.
"However, once
again, the growth we are seeing is slower than in the previous three months and
this can be partly attributed to pressure from rising costs.
"Indeed, 90% of
builders reported increasing material prices in the first three months of 2018
and this is the highest reading on record. Insulation, bricks and timber are
the materials that have increased the most and builders are predicting that these
price increases will continue.
"We are also
seeing increased salaries for tradespeople stemming from the acute skills
crisis and that, coupled with material price hikes, are squeezing margins and
stifling growth for construction firms of all sizes.
“In terms of house
building, these latest results should sound some alarm bells with the workloads
of SME house builders dropping off in the first quarter of this year. In
2017/18, 197,000 homes were started in England but this is some way off the
Government’s target to build 300,000 homes per year. The FMB has worked closely
with the Government to identify how to remove barriers to small local house
builders, but these latest results act as a reminder that there is more to be
done.
"The FMB would
now like to see the continued and speedy implementation of some positive
Government policies designed to bring forward more small sites, properly
resource planning departments and increase the flow of finance to SME house
builders. If we are to reach our ambitious house building targets, we cannot
rely solely on the largest house builders.”
