Small building companies are reporting falling workloads, material costs going up, and a shortage of available workers, according to the latest State of Trade Survey Q3 2024, from the Federation of Master Builders (FMB).

The FMB’s latest State of Trade Survey for Q3 20024 reveals a challenging economic climate for small building companies across the UK with 32% of FMB members reporting falling workloads over the past quarter.

Brian Berry, Chief Executive of the FMB commented: “Enquiries are also down, as is employment, with over a third of members struggling to recruit bricklayers and carpenters. What is concerning is that the poor numbers reported by builders seem to be here to stay as they have been a constant throughout 2024. The last time such a negative trend was reported was in the years following the financial crisis of 2008.

“The Government missed a key opportunity in the October Budget to announce serious funding to tackle the skills crisis in Britain while tax rises, such as the increase to employers’ National Insurance contributions, creates additional barriers with firms already struggling to recruit staff.

“The Government needs to prioritise boosting construction skills if it is serious about having a high-quality construction industry capable of delivering the ambitious housebuilding targets it has set out.”

The FMB State of Trade Survey for Q3 2024 found:

Market conditions

• Workloads are down 7% on the previous quarter.
  • 32% of members reported a decline in workloads, with 41% seeing no change.
• Enquiries are down 3% on Q2 of 2024
• Employment over Q3 of 2024 has declined once again, seeing a 4% on the second quarter.
  • The most common type of work for an FMB member were renovations and major works

Skills

• 23% of members reported a decrease in the number of employees, which is similar to Q2 (24%) but lower than Q1 2024 (28%)
• 35% of members are struggling to hire carpenters, down from 41% in Q2 2024
• 28% are struggling to hire bricklayers, down slightly from 29% in the previous quarter.
• Difficulties in recruiting general labourers have substantially increased according to 34% of members, up from 26% in Q2 2024. Challenges hiring roofers have increased from 13% to 16%, and painters and decorators from 11% to 13%
• 38% of members have reported shortage of skilled tradespeople has resulted in job delays.

Changes in prices and costs

• Approximately 65% of members indicated that rising costs led to higher prices for their services, a slight decrease from 67% in Q2 2024
• 54% of members who experienced rising costs reported lower-than-expected business profits or financial losses, a slight increase from 52% in the previous quarter.
• 26% of respondents said that cost pressures have caused them to restrict their recruitment plans, a slight increase from 22% in Q2 2024. Around 10% revealed that their business viability was compromised, putting them at risk of closure.