Construction SMEs
enjoyed rising workloads in the second quarter of 2018, despite continuing
concerns over skills shortages and increasing costs, according to the
Federation of Master Builders (FMB).
Key results from the
FMB’s latest State of
Trade Survey, which is the only quarterly assessment of the UK-wide SME
construction sector, include:
•
Construction SME workloads remained positive in Q2 2018 and grew at a faster
rate than they did in the first quarter of 2018;
•
The construction SME sector has now enjoyed more than five years of consecutive
quarterly growth;
•
More than three-quarters (76%) of builders reported increasing material prices
in Q2 2018;
•
Two-thirds (65%) of construction SMEs are struggling to hire bricklayers and
60% are struggling to hire carpenters and joiners;
•
More than half (54%) of construction SMEs expect salaries and wages to increase
over the next six months.
Brian
Berry, Chief Executive of the FMB, said: “The second quarter of 2018 proved
to be a positive one for the UK’s builders. Our latest research shows that
firms enjoyed stronger growth in workloads than they did in the first three
months of this year.
"Pleasingly, the
construction SME sector has now enjoyed more than five years of consecutive
growth. Furthermore, employment rose at a faster pace in the second three
months of 2018 than it did in the first three months. Looking ahead, despite
growing political uncertainty and Brexit now less than a year away,
construction SMEs remain positive. Businesses are optimistic with nearly half
of firms predicting rising activity levels over the next three months.
“Despite this
optimism, the sector should not be too complacent because strong headwinds
remain in place. The sector is still contending with rising skills shortages.
The latest evidence reveals that nearly all of the key occupations have become
harder to recruit in the second quarter of this year compared to the previous
three months. Bricklayers continue to be the hardest to recruit with nearly
two-thirds of firms struggling to hire them, and carpenters not far behind.
Without guaranteed access to skilled EU workers, there is a real possibility
that skills shortages will further intensify.
"Skills shortages
are also the leading cause of rising wages. This, coupled with the fact that
margins continue to be squeezed by significant material price increases, should
add a cautionary note to these otherwise encouraging findings. While we wait to
hear what the post-Brexit immigration system will look like, we are hoping that
the Government will listen to the needs of the sector. The construction
industry is a cornerstone of the UK economy, so it’s in all of our interests to
do what we can to support its small firms.”
