THE fall in UK construction activity for the second consecutive month should be a ‘wake-up call’ that ‘bold’ new policies are needed, according to the Federation of Master Builders (FMB).
Responding to the latest S&P Global / CIPS UK Construction PMI® figures, the organisation called for new policies to help kickstart building activity to support economic growth.
Brian Berry, chief executive of the FMB, said, “This new construction data shows that the industry has returned to its pandemic levels of activity. As the cost-of-living crisis deepens, consumers are cutting back, but builders also face increased costs on materials. This creates a difficult and clearly damaging situation.
“Bold solutions are required by the new government under Liz Truss. Delivering a UK-wide retrofit strategy to improve the efficiency of the nation’s homes would be a huge boost for local builders and local economies alike. It would also cut homeowners bills and help ensure the UK’s energy security. More immediately we urge the government to remove VAT on repair, maintenance and improvement work so that savings can be passed on to cash strapped consumers.”
Joe Sullivan, partner at MHA, believes the summer holiday season and government ‘paralysis’ have combined to bring the construction sector down to earth.
He said, “The industry has managed to maintain growth since early 2022 until the tables turned last month. The summer holiday season and the paralysis of government over the past six weeks have stunted the industry, especially the civil engineering sector. The contraction does not look like it will begin to abate any time soon.
“The number one priority must be to guard against soaring energy costs causing a rash of business failures in the sector. The new prime minister Liz Truss could take two measures immediately to help: reinstate the red diesel rebate and provide additional support for the most energy intensive aspects of the sector, such as aggregate, asphalt and cement businesses. These measures would help curtail the inflationary pressures throughout the supply chain.
“The labour market remains very tight. Skilled tradespeople increasingly shop around and work where the pay is highest which serves as an added stimulant to wage inflation. The Construction Industry Training Board (CITB) recently stated a larger number of workers are needed to deliver on industry demand in the medium term. The concern is that when businesses are focussed on survival recruitment, training and skills development may all suffer, storing up further issues for the future.”
