Smaller and medium sized builders in the UK saw rising workloads in the second quarter of 2018 despite continuing concerns about skill shortages and increasing costs, the latest state of the trade survey shows.
Indeed, workloads grew at a faster rate than they did in the first quarter of 2018 and overall the construction SME sector has now enjoyed more than five years of consecutive quarterly growth.
The survey from the Federation of Master Builders (FMB) also shows that 76% of builders reported increasing material prices in the second quarter 2018, some 65% are struggling to hire bricklayers and 60% are struggling to hire carpenters and joiners.
But the outlook is positive with more than half, some 54%, of construction SMEs expecting salaries and wages to increase over the next six months.
‘The second quarter of 2018 proved to be a positive one for the UK’s builders. Our latest research shows that firms enjoyed stronger growth in workloads than they did in the first three months of this year. Pleasingly, the construction SME sector has now enjoyed more than five years of consecutive growth,’ said Brian Berry, FMB chief executive.
‘Furthermore, employment rose at a faster pace in the second three months of 2018 than it did in the first three months. Looking ahead, despite growing political uncertainty and Brexit now less than a year away, construction SMEs remain positive. Businesses are optimistic with nearly half of firms predicting rising activity levels over the next three months,’ he explained.
But Berry also pointed out that despite this optimism, the sector should not be too complacent because strong headwinds remain in place such as rising skills shortages. ‘The latest evidence reveals that nearly all of the key occupations have become harder to recruit in the second quarter of this year compared to the previous three months. Bricklayers continue to be the hardest to recruit with nearly two thirds of firms struggling to hire them, and carpenters not far behind,’ he said.
‘Without guaranteed access to skilled European Union workers, there is a real possibility that skills shortages will further intensify. Skills shortages are also the leading cause of rising wages. This, coupled with the fact that margins continue to be squeezed by significant material price increases, should add a cautionary note to these otherwise encouraging findings,’ Berry added.
As Brexit negotiations move forward ahead of the official leaving date at the end of March next year, the FMB is urging the Government to listen to the needs of the sector. ‘The construction industry is a cornerstone of the UK economy, so it’s in all of our interests to do what we can to support its small firms,’ Berry concluded.
