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SME construction growth slows

Words: Laura Edgar
House building / iStock

The small and medium-sized enterprise (SME) section of the construction sector grew in the second quarter of 2017, but at a slower rate than the first three months of the year, according to a Federation of Master Builders (FMB) trade survey.

The second quarter of 2017 was the 17th consecutive quarter that has seen positive growth.

The FMB’s State of Trade Survey for Q2 2017 also found that the almost one in two construction SMEs predict a rise in workloads in the coming three months. Just 9 per cent think workload will decrease.

Eighty-three per cent of builders think that material prices will rise over the next six months.

Other statistics from the survey include:

  • 60 per cent of construction SMEs are struggling to hire bricklayers;
  • 57 per cent are struggling to hire carpenters and joiners;
  • 47 per cent are struggling to hire plumbers; and
  • 62 per cent expect salaries and wages to increase over the next six months.

Brian Berry, chief executive at the FMB, said: “Rising material prices and salaries could be starting to dampen growth among construction SMEs. However, it is encouraging to see that the sector has continued to grow despite the recent snap general election and the resulting hung Parliament.”

He said the construction SME sector is particularly vulnerable to any dips in consumer confidence that might come from periods of political uncertainty and therefore homeowners may have decided to delay any spending on new extension or loft conversions. This would account for the slowdown in growth seen in the second quarter of 2017, he said.

Most construction SMEs are struggling to recruit key tradespeople and there are shortages in other trades, such as plumbers and plasterers, starting to creep up, he noted.

Going forward, as Brexit is negotiated, the construction has urged ministers to “bear in mind their strategic housebuilding and infrastructure targets before pulling up the drawbridge on EU migrant workers”.

State of Trade Survey for Q2 2017 can be found on the FMB website (pdf).

* In Q2 2017, 349 construction SMEs responded to the survey.

Image credit | iStock