An increasing industry skills shortage is significantly increasing salaries among small building firms, according to the Federation of Master Builders (FMB).

The organisation's latest State of Trade Survey for Q1 2016 predicts output prices, wages, salaries and material costs are all projected to rise over the next six months.

Brian Berry, Chief Executive of the FMB, said over half of SME's are forecasting wages and salaries will rise during the six-month period.

"Given that brickies are already able to command wages of up to £60,000 per year in London and around £45,000 a year in the North of England, it’s clear that the skills squeeze is starting to push up costs for construction SMEs," he said.


"A whopping 55% of small building firms are currently reporting difficulties hiring bricklayers, which makes these tradespeople the most in-demand of all construction workers. This particular skills shortage is of course linked to the steady growth in private house building."

Mr Berry added while two-thirds of firms expect workloads to increase over the coming three months, skills shortages and the knock-on effect on wages/salaries remains a "major cause for concern".

"We need tens of thousands of new and returning construction workers to pick up the slack, or this growth among construction SMEs could so easily unravel," he said.

"The Government is hoping to address the skills shortages through the new Apprenticeship Levy, which is due to come into force in exactly one year. However, I have spoken to many small construction bosses who have major concerns about the impact that the new funding arrangements, which will come into effect alongside the levy, will have on their ability to hire an apprentice.

"The Government must work closely with the construction industry to ensure its new system is as easy to use as possible, or else we could see apprenticeship training by small firms nose dive at exactly the wrong time."

(LM)