The pace of growth among Welsh construction SMEs quickened in Q3 2018 compared with the previous quarter, 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 SME construction sector, include:
- The pace of growth among Welsh construction SMEs quickened 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;
- The construction SME sector has now enjoyed five and a half years of consecutive quarterly growth;
- 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.
Ifan Glyn, Director of FMB Cymru, said: “The Welsh building industry is in robust health, bucking the trend of dampening growth seen in other parts of the UK. The results for Wales are particularly impressive when you consider the challenges facing all UK builders in the shape of rising material prices and wages. However, there is no room for complacency as the skills crisis could threaten rising workloads in Wales. Many firms simply cannot hire the tradespeople they need to carry out projects. More than two-thirds of construction SMEs are struggling to hire bricklayers and nearly as many are struggling to hire carpenters and joiners. The UK Government must take account of the worsening construction skills shortage when finalising the post-Brexit immigration system. London is particularly dependent on migrant labour with over a third of the workforce coming from outside the UK. If London no longer has access to the EU migrant workers it currently relies on, it could easily tempt Welsh builders with higher wages and salaries.”
Glyn concluded: “However, construction employers also have a duty to train more home-grown workers to ensure we have an ample supply of tradespeople in the medium to longer term. The principle cause of the skills gap is the industry’s poor image, which is turning people off a career in construction. There’s a disproportionate number of rogue firms operating in the construction industry compared to other sectors because construction is inadequately regulated. Cowboy builders would find it very hard to operate in an industry that is licenced. Professionalising the industry in this way would vastly improve the image of the sector, making it a much more appealing career choice. In turn, having enhanced access to skilled labour would unshackle construction’s huge potential as an economic driver in Wales.”
