CONSTRUCTION GROWTH IN FINAL QUARTER OF 2015, BUT A SLOWER RATE25 January 2016
SME BUILDING FIRMS ACROSS THE COUNTRY SAW THEIR BUSINESS GROWTH DIP IN THE FOURTH QUARTER OF 2015, ACCORDING TO THE FEDERATION OF MASTER BUILDERS (FMB) IN THEIR LATEST TRADE SURVEY.
Looking closer at the results we can see that 29% of firms claimed to see an increase in business growth, down from 39% three months earlier and 23% of firms said they saw a lower workload, up from 13% in the previous quarter.
Over the course of the next quarter businesses are projecting a rise in output levels, only a slower rate than the previous quarter. 19% of firms predict a drop in workloads in the next three months from 14% last quarter whilst the number of firms predicting higher levels dropped from 32% last quarter to 22%
Over the next six months wages and salaries, material costs and output prices are expected to increase, however the net balance for output prices did post a fall, of two percentage points, as fewer respondents (45% vs 47%) expect prices to rise.
FMB chief executive Brian Berry said: “The building industry remains confident of continued growth but the slowdown we saw in the last quarter is a cause for concern. Undoubtedly, the adverse weather experienced in large parts of the country has played its part, by causing projects to overrun and costs to spiral. However, the fact that both current and expected construction workloads are down in every region is worrying given some of the gloomy predictions being made about the wider economy.”
Mr Berry continued: “Most concerning is that the last three months of 2015 represent the first quarter in nearly three years in which private sector SME housebuilding showed a negative balance. Even if this is a temporary blip, it comes at a time when merely manging to tread water would be inadequate in tackling the housing crisis. We need firms of all sizes firing on all cylinders if we’re going to address the chronic under-supply of housing but, unfortunately, a complex set of problems continue to constrain smaller developers. A concerted effort to tackle ongoing issues around access to finance, availability of suitable small sites and shortages of skilled labour is vital. The survey findings underline the latter point, showing 52% of our members reporting difficulty in finding carpenters and joiners, and 50% continue to have trouble hiring quality bricklayers.”
He concluded: “We still expect to see growth in our sector continue throughout 2016 and we are optimistic that businesses can bounce back from what appears to have been a disappointing end to the year. However, the coming 12 months still hold in store considerable headwinds, not least the fears over the wider economy slowing down. If 2016 starts in anything less than a positive fashion, we could see growing fears that the hard-earned gains made by the construction industry over the past two or three years are indeed under threat.”
How has your company faired in the previous quarter?