The FMB’s latest State of Trade Survey is a quarterly assessment of the UK-wide SME construction sectors.
Key results from the survey included:
- 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 (since Q2 2013)
- 41% of construction SMEs predicted increases in workloads over the next three months, down from 48% in the previous quarter
- 82% of builders predicted that material prices would rise in the next six months
- 61% of construction SMEs were struggling to recruit carpenters and joiners, and 59% were struggling to hire bricklayers
- over half (58%) of construction SMEs expected salaries and wages to increase in the next six months.
“Material price hikes and skills shortages are putting the brakes on growth among the UK’s small building firms,” said Brian Berry, chief executive of the FMB (pictured above).
“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.
- FMB backs government's council housebuilding approach
- Offsite construction not silver bullet to solving housing crisis, says FMB
- 90% of builders say most homeowners fail to ask for written contract
“However, our latest research shows that rising costs are dampening the performance of construction SMEs.”
Brian claimed that the spike in salaries was 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,” continued Brian.
“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.”
Brian believed that although the SME construction sector was still growing, the government needed 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,” he added.
“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.
Brian concluded: “On the domestic front, we are urging the housing minister to turbo-charge the SME housebuilding 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.”