SCOTTISH construction SME workloads rose faster than at any time since the 2007 financial crisis, the Federation of Master Builders (FMB) Scotland has said.
Key results from the FMB’s State of Trade Survey for Q1 2017, which is the largest quarterly assessment of the UK-wide SME construction sector, include:
* Scottish construction SME workloads rose faster than at any time since Q4 2007;
* One in two construction SMEs predict rising workloads in the coming months, with just five per cent predicting a decrease in activity;
* However, 85 per cent of builders believe that material prices will rise in the next three months; and
* 58 per cent of firms are struggling to hire carpenters, the highest reported level since the financial crisis.
Gordon Nelson, director of FMB Scotland, said: “Scottish construction SME workloads have now risen for five consecutive quarters and rather than tapering off in advance of Article 50 being served, that growth seems to have accelerated in the first quarter of this year.
“At a time of growing concern about the strength of the Scottish economy, the robustness of the construction SME sector is a definite good news story.
“Even more encouragingly, the number of enquiries for future work has risen solidly and one in two firms are now predicting that their workloads will continue to rise in the coming months.”
Nelson continued: “This is not to say that the last three months have been without their challenges.
“Builders have experienced sharp rises in material prices since the depreciation of sterling in June last year and the subsequent spike in the cost of imported materials and products. Added to this is the rising cost of skilled labour which continues to be exacerbated by the ever-worsening skills shortage.
“The overwhelming majority of builders expect these trends to continue resulting in further increases in output prices in the next quarter – in layman’s terms, this means that builders will have to pass on these costs to the consumer.”
Nelson concluded: “The biggest concern for builders, however, will be the prospect of weakening consumer confidence. The risk of economic uncertainty impacting on consumer spending was already present due to confirmation of the UK’s departure from the EU and the possibility of another Scottish independence referendum in the medium term.
“Now that home owners will also be factoring in the UK General Election, Scottish builders may well temper their optimism. The repair, maintenance and improvement sector is the staple of most small local builders and is notoriously vulnerable to dips in consumer sentiment.
“Going forward, the industry is hoping that political stability will be re-established as soon as possible as both consumers and businesses respond best to political certainty.”
Notes for editors:
About the Federation of Master Builders
The Federation of Master Builders (FMB) is recognised as the largest trade association in the UK construction industry – representing thousands of firms in England, Scotland, Wales and Northern Ireland.
Established in 1941 to protect the interests of small and medium-sized (SME) construction firms, the FMB is independent and non-profit making, lobbying for members’ interests at both the national and local level.
The FMB is a source of knowledge, professional advice and support for its members, providing a range of modern and relevant business building services to help them succeed.
The FMB is committed to raising quality in the construction industry and offers a free service to consumers called ‘Find a Builder’.
Please visit www.fmb.org.uk.
How Experian compiled the FMB’s State of Trade Survey
The report is compiled by Experian and in Q1 2017 322 construction SMEs responded to the survey questions. The results reflect balances – ie the number of firms reporting a rise in workload against the number of firms showing no change or a fall. This gives a qualitative, as opposed to quantitative, overview.
Experian offers this clarification: “Balances reflect the percentage of responses reporting higher workloads against those reporting lower workloads. In some cases, though the chart suggests activity has fallen strongly, a large proportion of respondents indicated there had been no change in workloads compared with the previous quarter.”
The full report is available here: http://resources.fmb.org.uk/docs/SoTSQ12017-f.pdf.
The FMB constantly lobbies Government at all levels to boost output and raise standards of safety and professionalism in construction.
Director of External Affairs
Federation of Master Builders
T: 020 7025 2901
M: 07741 240664
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Contact: Gordon Nelson