4th Quarter 1999 - Key Findings Total construction workload of firms taking part in the FMB survey increased slightly in the final quarter of 1999, although there was again some reduction in workload of specialist contractors. The improvement is all in private sector work, and principally in repair, maintenance and improvement of existing housing. For this type of work, and also for new housing, the result is slightly better than had been anticipated in the third quarter, and the overall result also was a little ahead of earlier expectations. Results by region indicate relatively the best result in the South West. Eastern Counties firms, that reported the strongest growth last time, show a marginal fall, and there are also indications of downturn in Northern Counties, the North West, and South Wales. Enquiries regarding future work are reported to have held up relatively well, but survey respondents - except those in London Region and Yorkshire & Trent - anticipate a small reduction in work, in all sectors of the market except private housing new build, in the first quarter of 2000. However, they appear to be looking for no more of a fall than might normally be expected at this time of year, unless there is a further increase in interest rates, which is a concern identified in some firms' written-in comments. In relation to changes in the fourth quarter, and to expected changes in the first three months of the new year, results for the trend in employment are stronger than those for the trend in workload. Looking both back and forward, however, clear majorities of firms report and expect no change in numbers employed. This supports the impression that the change in workload in October-December, and that anticipated in January-March, is relatively small. Firms looking forward to a dip in their workload may be reluctant to shed labour because of the difficulty they perceive in obtaining skilled labour, to work either as direct employees or as sub-contractors. However, the situation they describe is one that is somewhat different from the traditional concept of 'skill shortages', as a result of distortion of the labour market by the new tax deduction scheme for sub-contractors in construction. Written-in comments again indicate that the most serious issue facing FMB members in 1999 has been a shrinking of the pool of skilled labour willing to work as sub-contractors, or as direct employees, in response to higher tax deductions. Firms are finding people who used to work for them as sub-contractors appearing as competitors, offering their services direct to the client. As generally they are not registered for VAT, this is intensifying price competition. First posted: 25 January 2000. Last modified: 25 January 2000.