4th Quarter 2002 - Introductory Notes Over 350 members took part in the Federation of Master Builders fourth quarter 2002 state of trade survey, which is around 50 or 17% more than last time. There is a relatively greater increase in the reported total workforce of the respondents firms, up around 30% at 5,250. On the other hand, their estimated aggregate turnover is only some 10% higher at around £275 million a year. These differing rates of increase may be explained by reference to the evidence given of the division of the workforce between those who are directly employed and those working as sub-contractors, the latter of whom, working only on a part-time basis for any one employer, contribute less to annual turnover. Last time the ratio of directly employed labour, including working proprietors, to sub-contracted labour was around 2:1, but this time it is much lower at 1.5:1. Readers are reminded that, as has been the case since the start of 1999, individual replies to the FMB survey are weighted by size of firm. There is still not a sufficient run of results on this basis to test and, if necessary, adjust the results for normal seasonal variations in building activity, but where changes from one survey to another appear to be due to such variations this is stated in the commentary. The regional analysis is now on the basis of Government Office Regions rather than standard regions. The principal change involves the creation of the Eastern GOR by merging East Anglia (i.e. Cambridgeshire, Norfolk and Suffolk) and the Bedfordshire, Essex and Hertfordshire segment of the South East standard region. The other change is the transfer of Cumbria from the North standard region to the North West GOR, the remainder of North becoming the North East GOR. As for two years prior to 2002 the FMB had collected data separately for the different segments of the South East standard region, it has been possible to produce retrospective results for that period for the Eastern and South East GORs, the most recent of which are included in Tables 1, 3, 5, 7 and 8 in this commentary. On the other hand, it is not possible to make any adjustment for the change between North and North West standard regions and the North East and North West GORs. However, given the very small size of the FMB survey sample in Cumbria, it is not felt there could have been any significant difference in results for the North standard region and North East GOR, or for the North West on the two slightly different bases. Readers are further reminded that from first quarter 2001 the survey has been extended to Scotland and Northern Ireland. The initial response from these two countries was somewhat disappointing, so their samples were increased for 2002. The response rate from Scotland appears now to have become established at a satisfactory level, but that from Northern Ireland is still weak, and the results that are shown for the Province should be treated with caution. Relative Importance of Different Types of Work From time to time the commentary on the survey refers to the relative importance of different types of work for the respondents to the survey. The most frequent remark is that repair, maintenance and improvement (RM&I) of existing private sector housing is the type of work in which the highest proportion of respondents is engaged. It may help readers of the commentary to know what proportions of respondents say they are engaged in this and other types of work corresponding to the divisions of the DTI construction statistics (excluding infrastructure construction, which is carried out mainly by civil engineering contractors relatively few of which are members of FMB). It should be noted that for non-residential buildings the DTI's definitions of 'new work' include improvements as well as new build, and the FMB questionnaire reflects this. The evidence from the fourth quarter 2002 survey, which is broadly in line with that obtained from earlier surveys, is that the proportions, measured by reference to replies weighted by size of firm, are as follows: Repair, maintenance and improvement of existing private housing 70% Repair and maintenance of non-residential buildings for private clients 58% Commercial work (new build and improvements) 52% Private housing new build 49% Industrial building (new build and improvements) 49% Public non-residential building (new build and improvements 44% Repair and maintenance of non-residential buildings for public clients 44% Repair, maintenance and improvement of existing social housing 38% Social housing new build 25% On the basis of these figures, the only clear conclusion is that, for FMB members generally, private sector work is relatively more important than work for public sector clients. The balance of work on housing and on non-residential buildings - private and public together - cannot be judged from these figures. First posted: 28 January 2003. Last modified: 29 January 2003.