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Wed January 20 2021

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Survey finds SME builders still struggling

15 Oct 12 The recession for small to medium sized enterprises (SME) in the construction sector continues, according to the latest state of trade survey from the Federation of Master Builders (FMB).

The FMB state of trade survey found that workloads in the SME construction sector have declined across all sectors, especially in housebuilding.

Some 39% of respondents to the FMB survey reported a decline in private new house building workloads in the third quarter of the year, and 40% predict a further decline in the last three months of this year.

A quarter of firms reported an increase during the quarter and 40% indicated that workloads had remained unchanged from the previous quarter, up from 35% in Q2. However, the outlook for workloads deteriorated again in the three months to September as the proportion of firms with positive expectations fell to 18%, from 22% three months ago.

Almost 70% of firms expect materials costs to rise over the six months to March, a slight increase from three months ago. In contrast, just 20% of respondents anticipate raising their output prices. 79% said wages and salaries would remain unchanged.

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Just 9% of firms expect to increase their staffing levels over the coming six months, down from 14% three months ago. However, 59% anticipate no change. This may reflect the more positive employment trends over the three months to September, although employment levels continued to decline on balance. Around 55% of respondents indicated no change in staffing levels, up from 47% in Q2 and 18% reported that they had hired more staff during Q3.

FMB chief executive Brian Berry said: “There is little doubt that we are in the midst of a serious housing crisis with fewer than half the number of new homes being built to meet current demand. The FMB survey results show that the SME construction sector remains in deep trouble. This time last year we had hoped that we would be seeing at least some signs of recovery on the horizon by now. However, it is becoming clear that that this situation is not going to resolve itself any time soon.”

He continued: "With the industry in such a fragile state the government must think very carefully about introducing any new burdens on the house building sector. We want to help the prime minister achieve his goal of building more houses in Britain and so we are making the case that now is not the time to be pushing on with policies designed during the economic boom. Instead real progress is required on deregulation."

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