Growth ‘Dampened’ Among Construction SMEs

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Growth ‘Dampened’ Among Construction SMEs

Growth has slowed for the small to medium-sized enterprise (SME) construction sector in the UK, with many companies finding it hard to hire bricklayers, carpenters, joiners and plumbers, and many others concerned about rising material prices in the next six months.

This is according to the Federation of Master Builders (FMB), revealing that although the sector did grow in the second quarter of the year it did so at a slower rate around most of the UK than in the first three months of the year.

The second quarter of 2017 was the 17th quarter in a row that the sector saw positive growth, so it’s been expanding for over four years. What’s more, nearly one in two construction SMEs predict that their workloads will increase in the next three months, while 62 per cent expect that salaries and wages will increase as well… so it’s not all doom and gloom in any way.

Chief executive of the FMB Brian Berry explained that hikes in material prices and salaries could be dampening growth for the construction sector’s SMEs but it’s still encouraging to see growth despite the General Election and the hung parliament.

He further noted that this particular sector is especially vulnerable to dips in consumer confidence that could arise due to political uncertainty and it could be that some homeowners opted to put off big spending decisions and big home improvement projects while the election was going on.

“Rising salaries are undoubtedly the result of the escalating construction skills shortage – construction workers know their worth and are demanding higher wages from their employers. The majority of construction SMEs are struggling to recruit key tradespeople such as bricklayers and carpenters and we’re seeing shortages in other trades, such as plumbers and plasterers, starting to creep up.

“With Brexit on the horizon and worrying talk of the so-called Tier 2 immigration system replacing the free movement of people, the construction industry urges ministers to bear in mind their strategic house building and infrastructure targets before pulling up the drawbridge on EU migrant workers,” Mr Berry went on to say.

A recent report from the Royal Institute of Chartered Surveyors (RICS) found that the UK’s construction industry could lose almost 200,000 workers from the EU after Brexit if the country does eventually lose access to the single market. It seems clear just how reliant the sector is on migrant workers given that this is nearly eight per cent of the total workforce – and the UK’s infrastructure pipeline could really suffer, since we seem so dependent on workers from the EU.

Head of policy with the RICS Jeremy Blackburn suggested that professions such as quantity surveyors be added to the UK Shortage Occupations List to encourage people to move to the UK and help support the industry.

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