Small builders bullish despite rising costs

Small construction firms enjoyed rising workloads in the first three months of 2017, despite growing concerns over the cost of labour and materials.

According to the Federation of Master Builders latest trade survey one in two members predict rising workloads in the coming months, with just 5% predicting a decrease in activity;

Around 85% of builders believe that material prices will rise in the next three months and around six out of 10 are reporting problems finding carpenters – a post financial crisis high.

Brian Berry, chief executive of the FMB, said: “Workloads rose in every part of the UK, with particularly positive results in the devolved nations.

“Given the concerns that wider consumer confidence might be weakening, it’s encouraging that smaller construction firms aren’t sensing any drop-off in demand for their services.

“Indeed, despite Article 50 being triggered and the growing likelihood of a hard Brexit, these latest results demonstrate that builders are increasingly confident about the immediate future, with one in two forecasting higher workloads during the next quarter.”

The survey covers the period before the announcement of a snap General Election, which may well cool consumer demand in the coming months.

Berry warned: “The combined effects of rising material costs and the ever-worsening construction skills crisis will therefore be reason enough for SME construction firms to be cautious in their optimism.

“If growth in real household income remains flat, and if consumer confidence is shaken by the impending snap General Election and the triggering of Article 50, there are plenty of potential pitfalls for builders to navigate.

“Nevertheless, as of yet, the much anticipated ‘Brexit effect’ has yet to hit what is considered to be the bellwether sector of consumer confidence and wider economic health.”

from Construction Enquirer http://www.constructionenquirer.com/2017/04/24/small-builders-bullish-despite-rising-costs/

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