Growth among the South’s builders remained in positive territory in the third quarter of this year, according to the Federation of Master Builders (FMB) South.
Key results from the FMB’s latest State of Trade Survey, which is the only quarterly assessment of the UK-wide SME construction sector, include:
- The pace of growth among Southern England’s construction SMEs remained stable in the third quarter of 2018;
- Across the home nations, activity rose at a slower pace compared with the previous quarter in England, Scotland and Northern Ireland, with Wales being the only home nation to experience activity increasing at a faster rate;
- Construction SME workloads remained positive in Q3 2018 but grew at a slower rate than they did in the second quarter of 2018;
- 86% of builders reported increasing material prices in Q3 2018, up from 76% in Q2 2018;
- More than two-thirds (68%) of construction SMEs are struggling to hire bricklayers and 59% are struggling to hire carpenters and joiners;
- More than half (58%) of construction SMEs expect salaries and wages to increase over the next six months.
Phil Hodge, Director of FMB South, said: “Construction in the south of England continues to demonstrate strong performance. Growth has remained in positive territory since the first quarter of 2017. The private residential repair, maintenance and improvement sector has proven to be particularly strong. There is a continued investment by homeowners in extending living spaces within existing footprints, rather than opting to move in these politically uncertain times. This has provided many southern builders with growing workloads. Indeed, this growth is particularly commendable given the considerable headwinds the sector is facing.”
Hodge concluded: “The skills shortage in particular is a challenge for builders across the region. These latest results match the highest levels on record for shortages of key skills like bricklayers. Demand for certain skills will likely be heightened by some large housing projects in the region that are being built simultaneously. These larger projects have led to a higher than normal demand for skilled workers. Ambitious projects such as Sherford in Devon, which will result in 5,500 new homes and Graven Hill in Bicester, Oxfordshire which is the UK’s largest self build and custom build housing project are good examples of this. With Brexit round the corner, regional skills shortages may well get worse rather than better. The London construction economy has been heavily reliant on migrant workers and if London is unable to hire EU workers post-Brexit, workers from elsewhere in the country could be pulled away by fast-rising London wages. We urge the Government to carefully consider their post Brexit migration policies and to think of what the key sectors in the UK economy, like construction, need.”