NEW research has revealed a ‘sharp decline’ in workloads, enquiries, and employment amongst small building companies in the UK.
The State of Trade Survey from the Federation of Master Builders (FMB) found that 40% of FMB builders are reporting a decrease in the number of work enquiries.
However, the repair, maintenance and improvement (RMI) sector remains ‘buoyant’ with most respondents reporting increased workloads in this field.
The FMB State of Trade Survey, which is released quarterly, is described as the longest running survey of its kind to track the experience of small to medium-sized (SME) construction firms in the UK.
Brian Berry, chief executive of the FMB, said, “The RMI sector remains fairly strong this quarter with more FMB members still seeing an increase in workload than a decrease, but worrying signs are on the horizon with a sharp drop off in enquiries.
“Housebuilding continues to struggle with more members reporting less workloads than there are reporting more. There has also been a sustained decline in enquiries, suggesting the picture will continue to worsen. Housing is rising up the political agenda as evidenced at the recent party conferences and this new data highlights why the Government should be concerned at a time when we need to be building more, and not fewer, new homes.
“The survey also highlights the continued pressure on bottom lines, with members putting up prices to accommodate for economic adversity and inflationary pressures. Worryingly we’re also seeing over half of small building companies falling below their expected margins.”
The survey highlighted the ongoing difficulty in recruitment has slightly increased. 39% of members are struggling to hire carpenters with 35% having difficulty hiring bricklayers. There has also been an upturn in difficulty hiring general labourers, with 34% reporting problems – up from 25% in Q2. Half of FMB members reported that jobs are delayed because they are struggling to hire skilled workers.
71% of respondents said material costs increased in Q3, with 55% expecting this to continue into the next quarter. The impact of increased outgoings has led to 71% of members increasing the prices they charge, with half reporting that the business in on track to make a loss or fall below expected margins.
Over a quarter report that they are restricting hiring new staff as a consequence of increased outgoings.
