Small
building companies remain nervous about hiring new staff and are
reducing the size of their workforce, according to a recent survey from
the Federation of Master Builders (FMB).
The FMB's State of Trade Survey for Q3 2019,
found the number of small to medium-sized (SME) construction companies
reporting a growing workforce had fallen, from 19% to 15%, while almost a
quarter (23%) reported they had reduced their headcount, up from 21%.
The key results are as follows:
• Employment
levels for SME construction companies remained in negative territory
for the second quarter in a row, following a five-year period of
positive growth.
• Overall
SME construction workloads have remained positive with 34% reporting
high workloads compared to 27% in the previous three months. 86% of SMEs
anticipate a rise in material prices, up from 77% in the previous
quarter.
• 56% of firms predict salaries and wages to increase, up from 51% in the last quarter.
• 56%
of SMEs reported difficulties hiring carpenters and joiners, overtaking
bricklayers (54%) as the trade that is hardest to recruit.
• Overall expectations for future workloads came down, with 19% predicting lower workloads up from 12% in the previous quarter.
Brian Berry, Chief Executive of the FMB, said: “Builders
are tired of the continued political uncertainty blighting the UK
economy. Stagnating staffing levels is a concerning sign, and if this
trend continues, we could see the capacity of the industry shrink at a
time when builders are needed more than ever. Skilled workers are scarce
in the construction industry, and it is critical we keep people
employed in the sector. The fact that SME firms are having to lay people
off and are holding off taking new people on is worrying.
“Small building
companies are also having to contend with eye-watering material prices, and
these are set to continue to rise. This coupled with continued wage inflation,
driven by skill shortages, is leaving many firms to have unsustainable profit
margins. This will ultimately mean less money for SMEs to invest and grow for
the future, and ultimately could see some firms having to close. The Government
needs to carefully consider the impact of new regulations that will impose
extra costs and cash flow restrictions on the sector such as Reverse Charge
VAT.”
