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Demand for building work remains ‘remarkably resilient’, says FMB

Consumer demand for building work remained strong in the three months following the vote for Brexit, new figures from the Federation of Master Builders (FMB) have revealed.

The findings from the FMB’s Q3 2016 State of Trade Survey, the only UK-wide assessment of the SME construction sector, show that ongoing workloads for construction SMEs remained solid despite the outcome of the referendum, suggesting that consumer demand – which accounts for the bulk of SME work – has held up far better than anticipated.

Brian Berry, chief executive of the FMB, said that he was pleased to see activity levels remain “remarkably resilient” despite the uncertainty around the EU vote.

He commented: “Some of the other key indicators of SME activity, such as employment levels, anticipated workloads and new work enquiries, are all positive, albeit showing slowed growth compared to the previous quarter. If we all agree that construction is a “weather vane” industry, and demand for home improvement and new build homes an important gauge of consumer confidence, then our results chime with the cautious positivity demonstrated across construction and the wider housing market.”

However, the report does show that growth has softened compared to the first half of the year and some parts of the UK have gone into decline, especially in London which is flat-lining despite the fact that it is typically one of the strongest markets for construction SMEs.

Berry continued: “Our feeling is that the construction skills shortage, which we know is particularly pronounced in London and the south east, is starting to bite.

“Our latest figures show that nearly two-thirds of SMEs are struggling to hire bricklayers and 55% are having a hard time sourcing carpenters and joiners. This highlights a different potential consequence of Brexit – the possibility that we will have a less flexible workforce.”

Some 12% of construction workers working in the UK are of non-UK origin, forming a vital part of a labour force that is already stretched, according to Berry.

He added: “Given that the skills gap is only expected to grow over the next decade, it’s vital that talented trades people continue to come to the UK. For this reason, we welcome the government’s u-turn on requiring companies to publish data on the percentage of foreign workers they employ. Such a move would send completely the wrong message to foreign workers currently living and working in the UK and those who might consider coming here.”

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