The pace of growth among small building firms in Northern Ireland quickened in the first three months of this year, despite an overall fall in workloads at the UK level, according to the Federation of Master Builders (FMB) Northern Ireland.
Key results from the FMB’s State of Trade Survey for Q1 2019, which is the only quarterly assessment of the UK-wide SME construction sector, include:
- UK-wide, SME workloads declined for the first time in six years as more respondents stated lower workloads (29%) compared with the final three months of 2018 (13%);
- In NI, there was a jump of 9 percentage points compared with the previous quarter. 41% of weighted responses were positive, down from 44% in Q4 2018, while around 59% of weighted responses were neutral, up from 44%;
- Skills shortages eased slightly among some occupations. Bricklayers were once again the trade in most short supply with 64% of firms having difficulties hiring them;
- A record-breaking 88% of SME builders anticipate that material prices will rise further in the next six months;
- Almost three-quarters (71%) of construction SMEs expect wages and salaries to increase over the next six months, up from 66% in the previous quarter.
Gavin McGuire, Director of FMB NI, said: “Yet again, Northern Ireland has exceeded all other home nations in terms of positive workloads for SME builders, despite economic uncertainty. Not only that, Northern Ireland has remained resilient while the UK as a whole has stalled, with overall SME workloads declining for the first time in six years.”
McGuire continued: “However, we can’t be complacent given the very real concerns over public sector construction projects drying up. This, coupled with the recent collapse of the social housing maintenance framework, has led to a sudden culture of low price bidding by contractors desperate to win work. In some cases, contractors are even bidding below the level at which they can make a profit on a project. This situation is unsustainable and we need procurers to work with industry to ensure this is no longer the case as if it continues, it could put the existence of some contractors at risk, which is bad news for the construction sector and bad news for Northern Ireland’s economy.”
McGuire concluded “Another major concern among builders at the moment is the rapid rise in materials prices. Margins in this sector are already paper thin so extra costs could end up stifling small construction companies, or lead to higher prices for homeowners. Securing a smooth and orderly Brexit will be key to ensuring prices don’t rise even further.”
