Results of the first
Build UK State of Trade survey for 2018 show that contractors have become more
cautious over their prospects. In the short term a modest recovery in workload
was anticipated during the second quarter after a first quarter that was disputed
by adverse weather conditions, although a general weakening in workload was
anticipated for the next twelve months.
The survey, which
was undertaken with Glenigan, found
that a balance of 9% of contractors expect their workloads to rise in 2018 Q2,
but 27% of firms expect their output to fall over the next 12 months.
These more cautious
expectations follow a weakening in output and new enquiries during the first
quarter of 2018. 40% of firms reported their first quarter output was down on a
year ago and 20% reported a year-on-year fall in new enquiries.
Despite the more
cautious view on output, 40% of firms were looking to increase their workforce
over the next 12 months. This suggests that many firms believe that they are
currently understaffed.
Labour availability
issues have impacted on contractors’ business performance, with 36% saying that
labour shortages had resulted in the late completion of work and over a quarter
(27%) reporting that it had prevented them bidding for work.
Overall labour
availability remains a concern with 25% of contractors reporting that the
recruitment of skilled labour had been more difficult than during the previous
three months.
Where contractors
had experienced difficulties in recruiting staff, firms cited lack of skills as
being an issue in 38% of cases. Lack of experience and required qualifications
were cited as factors in 43% and 33% of cases respectively.
Recruitment
difficulties are also impacting upon labour costs, with 64% of firms reporting
that their labour costs had risen during the quarter and 55% reporting that
they were higher than a year ago.
In addition, firms
have seen widespread increases in material costs. 82% of firms reported that
material costs were higher than during both the fourth quarter of 2017 and a
year earlier. Rising labour and material costs have increased overall building
costs, with 64% of firms reporting an overall increase in costs during the
first quarter.
