Despite a sustained recovery for small building companies right across the UK, the growth in new house building slowed down in both the public and private sectors, the survey shows.
Brian Berry, FMB chief executive described it as a worrying trend. ‘It is an indicator that we are failing to build the homes that are desperately needed. This is despite the rise in demand and the chronic shortage of new homes across the UK,’ he said.
‘For decades Britain has fallen way short of building the number of new homes that we need. Policies such as the Help to Buy scheme have begun to revitalise the housing market and reinvigorate demand but more needs to be done to increase supply and encourage smaller house builders to build more homes,’ he pointed out.
he also said that measures to boost the availability of land, to ease the regulatory burden and to improve access to finance all need urgent attention.
‘The prospect of continued rising overheads is also a major concern with around 43% of builders saying they may have to put up their prices to customers in the next six months. The government could help by reducing the rate of VAT from 20% to 5% on all housing renovation and repair work, including energy efficiency improvements,’ explained Berry.
‘A VAT reduction would be a real incentive to home owners across the board to think about getting a professional tradesperson in to quote on a variety of repair and maintenance projects, and would certainly help sustain this initial recovery in the SME construction sector,’ he added.
Overall the survey shows that SME workloads grew at a marginally slower pace in the three months to December 2013 when compared to the previous quarter. The proportion of building firms reporting a rise in workloads edged down to 41% from 42%, while those stating lower levels remained unchanged at 18%.
However, it also shows that businesses are anticipating rising activity levels over the coming three months when compared to the previous quarter. At 20%, fewer respondents expect workloads to decline, down from 24% in the third quarter of 2013. But the number of firms predicting higher workloads was also marginally down to 32% from 33%.
In the 2013 fourth quarter the regional composite indicators showed rising activity for all of the four home nations. Scotland’s net balance moved into positive territory for the first time since the first quarter of 2008 as it experienced the largest improvement of seven percentage points, taking it to plus four.
Output prices, material costs and wages and salaries are all estimated to increase in the coming six months. Around 43% of respondents anticipate a rise in output prices over the next six months, up from 36% in the previous quarter, but more than half of firms, 53%, anticipate no change.
After rising in the third quarter of 2013, latest figures for SME employment are disappointing, according to the FMB. Fewer respondents reported that their workforce had increased at 19% compared to 25%, while slightly more firms stated that their staffing levels fell at 20% from 19%.
