Construction SMEs in Wales reported slower growth in activity in the second quarter of this year, 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:
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The main indicator for the performance of Welsh construction SMEs (a measure of workloads, enquiries and expected workloads), fell by 25 percentage points in Q2 2018 to +14%;
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In Wales, there were more SME builders that reported rising workloads, enquiries and expected workloads than those that reported falling – this is the seventh consecutive quarter of positive results from SME builders in Wales;
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More than three quarters of builders expect material prices to continue to rise in the next six months;
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Two-thirds (65%) of construction SMEs are struggling to hire bricklayers and 60% are struggling to hire carpenters and joiners.
Ifan Glyn, Director of FMB Cymru, said: “We are still seeing clear signs of growth among construction SMEs in Wales. On balance, small builders remain positive about current and future workloads but our latest research carries some clear warning signs. Fewer than one third of responses were positive in the second quarter of this year, down from nearly half in the first three months of 2018. However, this is hardly surprising given the conditions they face. More than three quarters are expecting to see rising material prices over the next six months while skills shortages continue to bite. Two thirds report difficulties hiring bricklayers and sixty per cent have had difficulties recruiting carpenters and joiners. The message I hear time and time again from small builders is that there’s plenty of work out there, but too often they simply don’t have enough skilled tradespeople to take on those jobs. We are missing out on a golden opportunity for growth in the construction sector and the wider economy.”
Glyn concluded: “We need radical action now to tackle these skills shortages. The construction industry needs to step up and recruit and train many more people than we are currently. However, what makes this difficult is the construction sector’s poor due to the prevalence of rogue outfits. This is a crucial issue and one where the UK Government could play its part by introducing a full licensing scheme for the whole UK construction industry. This is the one measure that would, beyond doubt, help drive up standards and finally kick the cowboys out of our industry. In doing so, it would make a career in construction sector much more appealing to a wider audience. What’s more, almost eight per cent of builders and consumers now want to see a licensing scheme introduced and therefore the time is right for Ministers in Westminster to act.”
