Growth among
construction SMEs slowed in most parts of the UK in the third quarter of this
year, 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 Q3 2018 but grew at a slower rate than they did
in the second quarter of 2018;
- 86% of builders
reported increasing material prices in Q3 2018, up from 76% in Q2 2018;
- More than two-thirds
(68%) of construction SMEs are struggling to hire bricklayers and 59% are
struggling to hire carpenters and joiners;
- More than half (58%)
of construction SMEs expect salaries and wages to increase over the next six
months.
Brian Berry, Chief Executive of the FMB, said: “Growth among the UK’s construction SMEs
slowed in the third quarter of this year. A range of factors are at work here,
not least ever increasing material prices.
"Anecdotally, we
are hearing worrying reports of banks withholding previously agreed funding for
projects which is delaying start dates and dampening growth. This may or may
not be related to Brexit-nerves.
"The construction
skills shortage is also taking its toll. More than two-thirds of construction
SMEs are struggling to hire bricklayers – brickies are easily the most
sought-after tradespeople in the building industry currently. These latest
figures match the highest we’ve noted since records began a decade ago.
"These skills
shortages are also leading to projects being stalled because there physically
aren’t enough people to build them. Worse still, the scarcity of trades means
that when construction employers can find people, they are paying huge salaries
which is putting further pressure on margins.
“This slowdown in
growth should ring alarm bells for the UK Government and give rise to a total
rethink of its misguided post-Brexit immigration proposals. Currently, the
Government wants to significantly limit the number of construction workers
coming into the UK post-Brexit, labelling them ‘low skilled’ and therefore
somehow surplus to requirements.
"Migrant
construction workers are indispensable with 13 per cent of our construction
workers being from outside of the UK. If construction firms are unable to hire
migrant workers post-Brexit, the already severe skills crisis will worsen. This
will mean we won’t be able to the build the new homes the Government is keen on
delivering and infrastructure projects will grind to a halt. It is imperative
that the post-Brexit immigration system allows construction firms to continue
to hire workers of varying skill levels.
"We hope the
Government heeds the warning that these latest results show, before it is too
late.”
