Growth among Scottish builders slowed significantly in the second quarter of 2017, according to FMB Scotland.
Key results from the FMB’s State of Trade Survey for Q2 2017, which is the only quarterly assessment of the UK-wide SME construction sector, include:
- The overall indicator for the performance of Scottish construction SMEs saw a double-digit decline of 22 percentage points to +13;
- England was the only home nation whose construction SME sector grew at the same rate as Q1 2017;
- One-in-four construction SMEs in Scotland now predict rising workloads in the coming months – down from one-in-two predicted rising workloads three months earlier;
- 83% of builders think that material prices will rise in the next six months;
- Almost two-thirds (62%) of construction SMEs expect salaries to increase in the next six months.
Gordon Nelson, Director of FMB Scotland, said: “In the first three months of this year, Scottish building firms were growing as fast or faster than their English, Welsh and Northern Irish counterparts. However, these latest results suggest that the Scottish building industry’s wings were clipped in the second quarter of the year. Our survey covered the campaign period for the snap UK General Election, as well as its indecisive outcome in June. It may be that this period of political uncertainty resulted in the consumer confidence of Scottish home owners taking a hit. As Scottish construction SMEs work predominantly in the private domestic sector, this could have had a knock-on effect on Scottish builders.”
Nelson concluded: “Another concern is that over the next six months, the cost of doing business is set to rise for Scottish builders and cost pressures could put the brakes on growth among construction SMEs now and in the longer term. Wages and salaries are all projected to increase due to skills shortages and material prices are likely to continue to rise as they have done since the depreciation of sterling following the EU referendum. Building firms will have little choice but to pass these increases onto the client or consumer and this could further dampen growth for small construction firms. Looking ahead however, now that the political dust has settled in Westminster, we hope that the Scottish construction sector starts to fire on all cylinders once again and that the better-than-expected performance of the wider Scottish economy is reflected in the building industry.”
Notes to editors
The Federation of Master Builders (FMB) is the largest trade association in the UK construction industry representing thousands of firms in England, Scotland, Wales and Northern Ireland. Established in 1941 to protect the interests of small and medium-sized (SME) construction firms, the FMB is independent and non-profit making, lobbying for members’ interests at both the national and local level.
The FMB is a source of knowledge, professional advice and support for its members, providing a range of modern and relevant business building services to help them succeed. The FMB is committed to raising quality in the construction industry and offers a free Find a Builder service to consumers.
