The Federation of Master Builders

Welsh builders start year on a high

Published date: 02 May 2018

Welsh construction firms enjoyed strong growth in the first quarter of 2018, according to the Federation of Master Builders (FMB) Cymru.

Key results from the FMB’s latest State of Trade Survey, which is the only quarterly assessment of the UK-wide small and medium-sized (SME) construction sector, include:

  • In terms of workloads, expected workloads and enquiries, the overall indicator for the performance of Welsh construction SMEs rose by 20 percentage points in Q1 2018 compared with the previous quarter, to +39%;
  • More construction SMEs predict rising workloads in the coming three months, up from 38% in the previous quarter to almost half (49%) in Q1 2018;
  • 90% of builders reported increasing material prices in Q1 2018 – this is the highest reading on record;
  • More than half (58%) of construction SMEs are struggling to hire bricklayers and 55% are struggling to hire carpenters and joiners;
  • Two-thirds (66%) of construction SMEs expect salaries and wages to increase during the next six months, up from 62% in the previous quarter.

Ifan Glyn, Director of FMB Cymru, said: “Welsh construction SMEs have been experiencing growth for 18 months consecutively. It is also worth noting that workloads, expected workloads and enquiries for Welsh builders are the most positive of any other country or region of the UK. This is particularly positive given that Welsh firms experienced a post-Christmas lull in workloads in the first few weeks of the year. However, throughout February into March, activity picked up and the results have been overwhelmingly positive. This is despite the ‘Beast from the East’ wreaking havoc across the UK.”

Glyn concluded: “Construction employers should not be complacent though with some red flags present among these otherwise positive results. Material prices, in particular, are soaring with 90% of firms having noted price increases in the first three months of this year – this is the highest proportion since records began. The shortage of key materials are part of the reason that prices have spiked. At the start of the year, Welsh builders reported particular issues purchasing insulation and this tops the list in terms of materials that have risen the most. More generally, waiting times for a range of materials are longer than they were and material prices are nudging upwards. This, coupled with the fact that wages have continued to rise due to the increasing scarcity of skilled tradespeople, may well lead to the margins of Welsh construction firms being squeezed.”

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