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24/01/2019
Workload Growth For Construction SMEs Could Be At 'Tipping Point'
Workloads for construction SMEs have grown in the last few months but could mark a "tipping point", according to a recent survey from the Federation of Master Builders (FMB).
Despite this, the State of Trade Survey for Q4 2018 also showed concerns in a weakening housing market and increasingly nervous banking sector.
Approximately 42% of builders in the survey detected signs of a weakening housing market, while 20% of construction SMEs have had projects stalled in the past three months due to delays to loans, or loan refusals, from the banks.
Brian Berry, Chief Executive of the FMB, said: "Workloads for small construction firms continued to rise in the last quarter of 2018 but after 23 consecutive quarters of growth, these latest results could mark a tipping point. Mounting Brexit uncertainty is starting to have a tangible effect and the indicators are not good with almost half of builders reporting signs of a weakening housing market. Furthermore, a worrying one in five construction SMEs has had projects stalled in the past three months due to delays to loans, or loan refusals, from the banks. Together with ever-rising costs due to material price hikes and labour shortages, the headwinds are blowing in the wrong direction for the UK construction sector."
He concluded: "But more than anything, political uncertainty is the enemy of small building firms. Most construction SMEs work predominantly in the refurbishment sector and they rely heavily on the confidence of homeowners to spend their cash on home improvement projects. There is clearly a desperate need for political certainty but with less than two months to go until we leave the EU, we’re none-the-wiser about what lies ahead. Brexit deal aside, the Government is also happily ignoring the views of business as it designs its post-Brexit immigration system. If the Immigration White Paper remains as is, the construction industry will not be able to hire sufficient numbers of tradespeople from abroad and the industry will stall. The Government's house building targets will therefore be no more than a fantasy."
The full report is available here.
(CM/JG)
Despite this, the State of Trade Survey for Q4 2018 also showed concerns in a weakening housing market and increasingly nervous banking sector.
Approximately 42% of builders in the survey detected signs of a weakening housing market, while 20% of construction SMEs have had projects stalled in the past three months due to delays to loans, or loan refusals, from the banks.
Brian Berry, Chief Executive of the FMB, said: "Workloads for small construction firms continued to rise in the last quarter of 2018 but after 23 consecutive quarters of growth, these latest results could mark a tipping point. Mounting Brexit uncertainty is starting to have a tangible effect and the indicators are not good with almost half of builders reporting signs of a weakening housing market. Furthermore, a worrying one in five construction SMEs has had projects stalled in the past three months due to delays to loans, or loan refusals, from the banks. Together with ever-rising costs due to material price hikes and labour shortages, the headwinds are blowing in the wrong direction for the UK construction sector."
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He concluded: "But more than anything, political uncertainty is the enemy of small building firms. Most construction SMEs work predominantly in the refurbishment sector and they rely heavily on the confidence of homeowners to spend their cash on home improvement projects. There is clearly a desperate need for political certainty but with less than two months to go until we leave the EU, we’re none-the-wiser about what lies ahead. Brexit deal aside, the Government is also happily ignoring the views of business as it designs its post-Brexit immigration system. If the Immigration White Paper remains as is, the construction industry will not be able to hire sufficient numbers of tradespeople from abroad and the industry will stall. The Government's house building targets will therefore be no more than a fantasy."
The full report is available here.
(CM/JG)
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