Construction
industry bosses are reorganising their workforce in preparation for a potential
downturn, with higher levels of sub-contracting and lower levels of direct
employment, according to new research by the Federation of Master Builders
(FMB).
Key results from the
FMB’s State
of Trade Survey for Q2 2019, which is the only quarterly assessment of the
UK-wide SME construction sector, are as follows:
- There was a decrease in
employment levels among small construction firms for the first time in
more than five years with over one fifth (21%) of employers reporting a
reduced workforce;
- After a difficult start to
2019, workloads for construction SMEs grew slightly compared with the
previous quarter with more employers (27%) reporting higher workloads than
in the first quarter of this year (22%);
- Bricklayers are the trade in
shortest supply with nearly two-thirds (60%) of construction SMEs
struggling to hire these tradespeople and 54% struggling to hire
carpenters and joiners;
- Looking ahead, expectations
for the future weakened slightly. Just over one third of construction SMEs
(37%) are forecasting higher workloads over the coming three months, down
from 41% in Q1 2019.
Brian Berry, Chief
Executive of the FMB, said: “Years of Brexit uncertainty have resulted in
construction bosses starting to change how they employ their workforce.
"To ensure
their firms are ready for any economic shock-waves later this year, employers
are reducing their number of direct employees and relying more on
sub-contractors who are easier to shed if work dries up. The construction
industry has always used a significant proportion of subbies but the fact that
direct employment is decreasing, points to Brexit nerves among construction
bosses. This is the reality on the ground of what happens when years of
uncertainty are inflicted on the construction industry.
"Furthermore,
apprenticeship training has taken a hit as construction bosses are reluctant to
take on young people when they can’t be sure of future projects going ahead.
“Worse still, the
fear is that using more subbies can lead to a drop in the quality of our
builds. Direct employees, who are well-known to their firm, are much more
likely to follow the ethos of their company and build to the right standard.
" If
construction bosses are trying to protect their businesses by employing more
subbies, they might not always know how good these subbies are. Rebalancing the
workforce may seem like a good idea at the time, but it could lead to
reputation-damaging mistakes. If a downturn is on the horizon, reputation is
everything and construction employers can scrutinise the quality of their
workforce far more easily when they’re on the books.”
