NEW research has revealed small building companies are reporting falling workloads, material costs going up, and a shortage of available workers.
The findings were highlighted in the latest State of Trade Survey Q3 2024, from the Federation of Master Builders (FMB).
Brian Berry, chief executive of the FMB, said the survey reveals a ‘challenging economic climate’ for small building firms operating across the UK, with 32% of FMB members reporting falling workloads over the past quarter.
“Enquiries are also down, as is employment, with over a third of members struggling to recruit bricklayers and carpenters,” he added. “What is concerning is that the poor numbers reported by builders seem to be here to stay as they have been a constant throughout 2024. The last time such a negative trend was reported was in the years following the financial crisis of 2008.”
Berry claimed the UK Government missed an opportunity in the budget to announce ‘serious funding’ to tackle the skills crisis, while tax rises create additional barriers.
“The government needs to prioritise boosting construction skills if it is serious about having a high-quality construction industry capable of delivering the ambitious housebuilding targets it has set out,” he continued.
The survey for Q3 found that workloads are down 7% on the previous quarter; enquiries are down 3%; and employment has declined 4%. The most common type of work for an FMB member were renovations and major works.
23% of respondents reported a decrease in the number of employees, with 35% struggling to hire carpenters and 28% having difficulty hiring bricklayers. Difficulties in recruiting general labourers have ‘substantially increased’ according to 34% of members, while challenges hiring roofers have risen to 16%, and painters and decorators to 13%. 38% of FMB members reported that a shortage of skilled tradespeople has resulted in job delays.
Approximately 65% of members indicated that rising costs led to higher prices for their services. 54% of respondents who experienced rising costs reported lower-than-expected profits or financial losses, while 26% said cost pressures have caused them to restrict recruitment plans. Around 10% revealed that their business viability was compromised, putting them at risk of closure.
