The most recent State of Trade Survey reports that those reporting an increase in workload have decreased this quarter by 8%, compared to the findings in the previous quarter, but are still in positive figures. The new FMB data also reveals that growth in enquiry levels have remained stable for two consecutive quarters for Scotland showing future work has levelled out.
The impacts of the current financial climate are having a direct impact on builders, with 45% of members, across the UK, reporting that business profits were lower than expected this quarter and 1 in 10 members stated that their businesses were at risk of closure due to financial concerns. Three quarters of FMB members also reported an increase in outgoing costs in Q1 2023.
The FMB warns that without a clear industrial plan for Scotland with construction as a key pillar, small, local builders will struggle, leaving existing homes without energy efficiency improvements and desperately needed new houses unbuilt.
The FMB State of Trade Survey, which is released quarterly, is the longest running survey of its kind to track the experience of small to medium-sized (SME) construction firms in the UK. The latest survey for Q1 2023 found:
Scotland market activity
- Reported workload levels have seen a decrease of 8% compared to last quarter (21% to 13%).
- Enquiry levels have remained stable for two consecutive quarters.
Market conditions
- There is an overall recovery in enquiry and workload levels for the RMI sector as 14% of members report an increase this quarter.
- Almost nine in ten (87%) FMB members report an increase in material costs.
- The house building sector is continuing to struggle with more reporting a decline in workload that those seeing more work (-4%). However, this has improved on last quarter where it was -18%.
Skills
- At least one in three FMB members reported that they are struggling to recruit carpenters/joiners, bricklayers and general labourers are (41%, 36%, and 31%).
- Members report an overall net decrease in employment levels in Q1 2023 (-3%).
Impact of changes in prices and costs
- 87% of members reported that material cost had increased in Q1 2023.
- Three quarters (75%) of FMB members reported an increase in the prices they charge for work.
- 45% of members reported that business profits were lower than expected this quarter.
Gordon Nelson, Scotland Director of the FMB, said: “The weather during the first few months of 2023 partially explains the decrease in workloads experienced by local building firms in Scotland. On the whole though it is pleasing to note that both future enquiries and workloads are holding up: despite the continuing cost of living crisis and record inflation.”
Nelson continued: “Small local building firms are the backbone of the construction industry: from Lerwick to Lockerbie and from Stornoway to Selkirk. If they are to have the confidence to invest in their business and train the next generation of Master Builders, they will need a clear industrial plan which places the construction industry at its heart.”
“A critical area concerns our existing homes, Scotland has the oldest housing stock in Europe, and we urgently need a coherent and integrated plan to mobilise local building firms to deliver much needed insulation upgrades. Without this, Scotland risks missing the opportunity to deliver the Government’s own net zero targets. More energy efficient homes not only save consumers money on energy bills but improve levels of comfort and indoor air quality providing wider health and wellbeing benefits.”
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.
