London’s building industry performed strongly in the second quarter of 2018, despite increasingly serious skills shortages, according to the Federation of Master Builders (FMB) London.
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 main indicator for the performance of London construction SMEs (a measure of workloads, enquiries and expected workloads) rose by 2 percentage points in Q2 2018 to +12%;
• This was the first improvement seen for five quarters. The last recorded rise in optimism among London’s builders was back in Q1 2017;
• 89% of builders reported increasing material prices – the second highest level on record;
• Two-thirds (65%) of construction SMEs are struggling to hire bricklayers and 60% are struggling to hire carpenters.
Barry Mortimer, Director of FMB London, said: “London’s builders enjoyed rising workloads in the second quarter of this year and are also optimistic about the coming months. While sustained growth and this slight increase in activity are very welcome signs, any optimism should be tempered by the sharp rises seen in the number of firms reporting that they are struggling to hire bricklayers, carpenters and plasterers. London’s SME builders, as well as protecting themselves from sunburn, are scrambling to protect themselves from rising skills shortages. Having to turn away work due to a lack of staff is heart-breaking for small business owners, but this is the situation for many of the capital’s construction SMEs.”
Mortimer continued: “On top of the considerable constraints that lack of skilled workers imposes, Brexit worries and concerns are reaching a crescendo. The FMB’s recent call for clarity on post-Brexit visa rules is critical. London’s construction industry has leant heavily on skilled EU workers for some years now. Indeed, one in three of the capital’s construction workers is from the EU. An exodus of these workers, or any cliff-edge in terms of access to European workers, could hit the capital’s housing and infrastructure projects very hard indeed.”
Mortimer concluded: “As well as providing the certainty and stability which London businesses are craving for, the Government needs to take into account the needs of key industries like ours in deciding their post-Brexit approach to migration. It is vital to the London economy that its construction sector remains on the sunny uplands and retaining access to skilled migrant labour will be crucial to achieving this.”