Small construction firms warn growth is grinding to a halt

Courtney Goldsmith
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Small and medium-sized construction firms are warning that growth is slowing (Source: Getty)

Price hikes and skills shortages are putting the brakes on growth at the UK’s small building firms.

The Federation of Master Builders (FMB), Britain’s largest construction trade association, will today warn growth among small construction firms slowed in most parts of the UK in the third quarter of 2017.

Despite the slowdown, the third quarter marked the 18th consecutive quarter of positive growth in the construction small and medium enterprise (SME) sector.

Read more: It's official: The UK's construction sector has gone into reverse

The number of respondents to the FMB’s latest survey who predicted rising workloads in the coming three months fell from 48 per cent to 41 per cent in the third quarter.

Meanwhile, 82 per cent of builders said they expected material prices to rise in the next six months.

The sector also faces a skills shortage, with 61 per cent of construction SMEs struggling to hire carpenters and joiners and 59 per cent having trouble to hire bricklayers. As a result, more than half of construction SMEs expect salaries and wages to increase in the next six months.

“Although the SME construction sector is still growing, the government needs to keep a watchful eye on this slowdown,” said Brian Berry, chief executive of the FMB.

“With Brexit on the horizon, the government must keep the needs of the construction industry in mind as it negotiates the UK’s departure from the EU.”

The Federation of Small Businesses (FSB) will also today urge the chancellor to remove barriers for small housebuilders at the Autumn Budget.

Mike Cherry, FSB national chairman, said:

Achieving a game-changing productivity boost will only happen through incremental gains among the smaller firms that make up 99 per cent of our business community.

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