London’s building industry has collectively held its breath with growth remaining static in the third quarter of 2018, 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 pace of growth among London construction SMEs remained the same in Q3 2018 compared with the previous quarter;
- 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;
- 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.
Barry Mortimer, Director of FMB London, said: “Growth among London’s smaller construction firms has remained static in the third quarter of the year. So far in 2018, growth in London has been slower than it was throughout 2017. A key challenge that is preventing growth in the sector is the acute skills crisis. There is a rising number of SME builders struggling to find people with the right skills. Indeed, these latest results match the highest we’ve noted since records began a decade ago. Key skills affected are bricklayers, carpenters and plasterers.”
Mortimer concluded: “Concern about this ever-worsening skills crisis was amplified recently among London’s tens of thousands of construction SMEs by the Migration Advisory Committee’s report. Its recommendations ignored the pleas of construction employers who have called on the Government to introduce a visa system based on key occupations rather than arbitrary skill levels. London’s SME construction sector is much more reliant on migrant labour than anywhere else in the UK. Anecdotally, we are hearing of more and more of our migrant workers returning home as we edge closer to Brexit. To come out as winners in Brexit’s endgame, we need the Government to rethink its disastrous post-Brexit immigration policy or else London’s construction sector will grind to a halt.”
