Every quarter the FMB release its State of Trade Survey. It is the only survey of its kind to track the experience of small to medium-sized (SME) construction firms in the UK. It is a vital tool for our engagement with Government with the data being used to inform decision making. Here are some of the key points from the latest survey (Q2 2022).
Profits take a hit
The headline figure from this quarter’s survey shows that 49% of members have seen a negative impact on their bottom lines over Q2. Only 16% saw a positive impact, with 30% reporting no impact at all. Overall, this is not a positive picture, just shy of half of members are suffering in the current economic climate. The current outlook has prices up across the board for builders and consumers alike, which means the screw is being turned from both ends. Consumers are reluctant to spend money and members are seeing their prices go up, which creates a difficult environment to trade in.
Enquiries and workloads tumble
The second quarter of 2022 has seen significant downturns in workload and enquiries, compared to the last survey in Q1. Across all sectors enquiries plummeted, with only 3% reporting more enquiries, compared to 30% in Q1. This may indicate that the heat in the market is starting to cool off as consumers become wary of spending. Workloads also declined, but still hold at respectable levels. 19% of members reported more work, down from 33% last quarter. This shows the market is still holding steady, but with enquiries down sharply, will this continue to drop?
How are the different sectors coping?
The Repair, Maintenance and Improvement sector (RMI) is healthy with a reported 21% saying they had an increased workload. While this was down 6% on last quarter it’s still showing the market was fairly buoyant in Q2. Those reporting increased workload in housebuilding fell sharply, seeing a 13% drop on Q1. 8% of members reported an increase in workload in the housebuilding sector. The sharp decline could be indicative of a cooling off in this sector. This would also be backed by the enquiry figures which saw less members reporting an increase in workload than those that reported an increase. This is the first-time housebuilding enquiries have been tracking negatively since the pandemic.
Skill problems keep on going
Luckily, the serious problems in recruiting trades that occurred in the post lockdown work boom are subsiding and look to be on the decline. However key skills like bricklayers and carpenters/joiners are still proving to be a problem for 42% of members. This quarter, roofers became more difficult to hire for the first time since the pandemic, with 21% reporting it as a difficult trade to recruit for. 16% of members reported difficulty recruiting painters and decorators, which has been at this level since Q1 of 2022. While recruitment is still proving tricky for many trades, the broad trend appears to show an easing off in difficulty recruiting.
What are the FMB doing?
The FMB is preparing our engagement for the new government. We will be holding it to account in order to provide pragmatic and ambitious solutions to boost the sector. If the new government wants to deliver on levelling up promises it will be local builders that are best placed to boost local economies and provide jobs for local school leavers. That means a proper commitment to a long-term National Retrofit Strategy. It means licensing to protect consumers and boost the image of the sector. And it also means a favourable tax and training environment to support businesses into the future.
For more information download the full State of Trade Q2 2022 survey.
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