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Smaller builders report slowing growth

23 Oct 17 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.

The latest state of trade survey from the Federation of Master Builders (FMB) shows that the third quarter of 2017 saw its members’ businesses grow for an 18th consecutive quarter, since Q2 2013, although the rate of growth has slowed marginally compared to Q2.

The percentage of businesses reporting rising workloads was to 37%, down from 39% three months ago; the percentage reporting lower workloads edged up to 16% from 15%.

Business expectations for the future have tempered, with just 41% of respondents predicting higher workloads, down from 48% in the previous quarter. Those expecting lower workloads grew, to 11% from 9%.

Other highlights of the survey findings include:

- 41% of construction SMEs predict rising workloads in the coming three months, down from 48% in the previous quarter.

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- 82% of builders expect material prices to rise in the next six months;

 - 61% of construction SMEs are struggling to hire carpenters and joiners and 59% are struggling to hire bricklayers;

- 58% of construction SMEs expect salaries and wages to increase in the next six months.

FMB chief executive Brian Berry 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.”

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