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Construction SMEs workload on the rise

Words: Laura Edgar
Construction / iStock_000053640832

A recent survey has suggested that the workloads of small and medium-sized (SME) construction firms grew slightly in the first quarter of 2018.

This is despite “record” numbers of builders reporting rising material prices, said the Federation of Master Builders (FMB).

The organisation’s latest State of Trade Survey, which is published quarterly, reveals that SME workloads stayed positive in the first three months of 2018, but grew at a slower rate than Q4 in 2017.

The figures mean the SME construction sector has grown for five consecutive years.

According to the survey, 49 per cent of respondents predict a rise in workloads for Q2, rising from 38 per cent in Q4 in 2017.

An increase in material prices in Q1 2018 was reported by 90 per cent of builders – the highest result the survey has recorded.

The survey also found:

  • 58 per cent of construction SMEs are struggling to hire bricklayers.
  • 55 per cent are having difficulty hiring carpenters and joiners.
  • 66 per cent expect salaries and wages to increase during the next six months, up from 62 per cent in Q4 of 2017.

Brian Berry, chief executive at the FMB, said: “Workloads for builders continued to grow in the first quarter of 2018 despite the ‘Beast from the East’ wreaking havoc across the UK’s construction sites. However, once again, the growth we are seeing is slower than in the previous three months and this can be partly attributed to pressure from rising costs.”

He said insulation, bricks and timber are the materials that have increased the most, with builders predicting these price rises to continue.

“We are also seeing increased salaries for tradespeople stemming from the acute skills crisis and that, coupled with material price hikes, is squeezing margins and stifling growth for construction firms of all sizes.”

The survey results should “sound some alarm bells” with workloads of SME housebuilders “dropping off”, according to Berry.

“In 2017/18, 197,000 homes were started in England but this is some way off the government’s target to build 300,000 homes per year. The FMB has worked closely with the government to identify how to remove barriers to small local housebuilders, but these latest results act as a reminder that there is more to be done. The FMB would now like to see the continued and speedy implementation of some positive government policies designed to bring forward more small sites, properly resource planning departments and increase the flow of finance to SME housebuilders.”

State of Trade Survey Q1 2018 can be found on the FMB website (pdf).

* 370 construction SMEs responded to the survey, which was compiled by Experian for the FMB.

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