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SME builders report materials price hike

Words: Laura Edgar
Brick laying / Shutterstock_462881611

Small and medium-sized construction firms have reported increases in materials prices in the third quarter of 2018.

The Federation of Master Builders’ (FMB) State of Trade Survey, a quarterly report, suggests that the number of SMEs facing rising materials costs has increased from 76 per cent in quarter 2 to 86 per cent.

Construction workloads for SMEs remained positive, but grew at a slower rate than they did in Q2.

Brian Berry, chief executive of the FMB, attributed the slower growth rates to a number of factors, including the increase in prices of materials.

The survey also found:

  • 68 per cent of construction SMEs are struggling to hire bricklayers;
  • 59 per cent of construction SMEs are finding it hard to hire carpenters and joiners; and
  • 58 per cent of construction SMEs expect salaries and wages to increase over the next six months.

Berry said the skills shortage figures are the highest the FMB has noted since records began 10 years ago, with the struggle to hire bricklayers matching the peak reached in Q4 of last year. This is leading to projects being stalled because there are not enough people to deliver them.

“Worse still, the scarcity of trades means that when construction employers can find people, they are paying huge salaries, which is putting further pressure on margins.”

Alarm bells should be ringing for the government. The slowdown in growth should be a cause for a rethink of its “misguided” post-Brexit immigration proposals, said Berry. Migrant construction workers are “indispensable”, with 13 per cent of construction workers being from outside of the UK.

“If construction firms are unable to hire migrant workers post-Brexit, the already severe skills crisis will worsen. This will mean we won’t be able to the build the new homes the government is keen on delivering and infrastructure projects will grind to a halt. It is imperative that the post-Brexit immigration system allows construction firms to continue to hire workers of varying skill levels. We hope the government heeds the warning that these latest results show before it is too late.”

The State of Trade Survey Q3 2018 can be found on the FMB website (pdf).

Read more:

SMEs struggle to hire bricklayers, suggests survey 

Construction SMEs workload on the rise

SME construction growth slows

Image credit | Shutterstock