Small builders stay upbeat but warn growth is slowing

Britain’s small builders have been enjoying a growth spurt that has lasted for more than four years and is set to continue, according to the Federation of Master Builders (FMB).

Although growth is slowing, May to July this year marked the 17^th successive quarter of “positive growth.” The trade body’s latest quarterly survey, out today, stated: “The construction SME sector has been growing for more than four years.”

Almost half of SMEs expect increases in business in the next quarter, with just nine per cent predicting a drop in activity. However, the rise in workloads expected by many firms is set against concerns over prices of materials and wages.

Eight out of 10 builders expect material prices to increase in the next six months, and six out of 10 construction SMEs are finding it difficult to hire bricklayers. Shortages of carpenters and joiners are reported by 57 per cent of firms, and 47 per cent are finding it hard to recruit plumbers.

Brian Berry, the FMB’s chief executive, commented: “Almost two-thirds of construction firms expect wages and salaries to increase over the next six months.”

He added: “Builders’ margins are narrower than ever. Firms may be forced to pass these increases onto the client or consumer as the cost of building work rises. In the medium to longer-term, this could serve to dampen demand for construction work as inflation rises and consumer spending is hampered.”

His warning comes as another survey released today reports falling confidence among Scottish builders. 

The construction industry in Scotland is negative about the prospects for the coming year, according to the latest Scottish Construction Monitor. 

It cites growing fears over the future pipeline of new work – with firms are concerned that, as major infrastructure projects such as the Queensferry Crossing come to an end, the industry is likely to suffer a major contraction due to an apparent shortage of other work to fill the gap.