ONS figures show fall in SME activity

Work for small builders continued to drop significantly in the second quarter, despite activity across the whole sector rising by 0.5%.

Figures released by the Office of National Statistics on Friday show that repair and maintenance work – overwhelmingly carried out by SMEs – fell by 6.1% in the public housing sector and by 2.5% in the private housing sector.

The Federation of Master Builders (FMB) again called on the government to reduce the rate of VAT to 5% on all repair and maintenance work to resuscitate the market for its members.

Richard Diment, director general of the FMB, said: “This comes as no surprise as the FMB’s quarterly State of Trade Survey shows that SMEs’ workloads have been falling for more than three and a half years.

“For the many thousands of small businesses in the construction industry this type of work is their main source of income which is why this latest figures are so concerning.

“The government must do everything it can to encourage responsible lending by the banks to homeowners looking to improve.

“It should also make repairs in the private and public housing sectors more affordable by reducing the rate of VAT to 5% on all residential repair, maintenance and improvement work.

“The government continues to suggest small businesses will benefit from increased workloads thanks to the Green Deal which launches in October 2012, but even if this turns out to be the case many can’t hang on that long.”

Today the FMB also joined other federations and employers in calling on the industry to recruit more apprentices as the new college term approaches.

A recent survey by CITB-ConstructionSkills showed the number of 16-19 year olds in the industry has fallen by 52% since 2008.

Only 12% of the sector’s workforce is aged 24 and under, compared to 20% who are within ten years of less of retirement.

Kevin Bennett, training manager for BAM Nuttall said: “Apprentices demonstrate commitment and loyalty and their keenness to learn and improve is vital to supporting the sustainability of our business.

“Each year we are expanding and developing our apprenticeship programmes due to the direct business benefits we see.”

Geoff Lister, chairman of the Cross-Industry Construction Apprenticeship Task Force, said: “With the new college terms just around the corner, now is a perfect time for businesses to take action.”