That’s the key finding of the latest survey by the Federation of Master Builders (FMB), whose membership of small to medium-sized building firms make up the majority of the industry.
With employment continuing to fall in the last three months of 2012 and overhead costs rising, FMB members are pessimistic about 2013.
The survey shows that builders’ workloads decreased last year, and are expected to keep falling at least for the first half of 2013.
However, the rate of decline in the housing sector slowed in the fourth quarter of2012, with many specialist trades reporting the first rise in employment since early 2011.
In the non-residential sector there were no such signs of encouragement. Many firms said they may have to introduce price rises as overheads continue to eat into profit margins and the likelihood of lay-offs loomed.
FMB chief executive Brian Berry said: “These figures reinforce what we already knew that 2012 was a very tough year for construction, and the outlook for 2013 is still bleak. The government must act now to support building firms and prevent workers from losing their jobs over the next 12 months.”
Overall, the survey showed:
Workloads continued to decrease in all sectors: The pace of contraction slowed down in the housing sectors, but the opposite was true for non-residential parts of the industry.
The composite indicator continues its downward trend across all regions and devolved nations: across the board all 12 regions and devolved nations experienced negative indicators. Only in Wales, Northern Ireland and London was there any indication of the rate of decline slowing down. The downward trend was particularly pronounced in Scotland, the north of England, the East Midlands and the southwest.
Output prices, wages and salaries and material costs are all expected to go up in the coming six months: Although in the case of output prices and wages and salaries the vast majority of firms stated no change at 60% and 77% respectively.
Employment in the construction SME sector continued to decline in Q4 2012: The overall expected employment levels are predicted to fall at a slower rate over the next six months and specialist builders reported a positive balance for first time since the first quarter of 2011.
Mr Berry said the fate of the industry lay only in the hands of the government, saying: “If the government does not act swiftly and decisively to support SME builders – the backbone of the British construction industry – then we will undoubtedly see more firms going to the wall and job losses across the board in 2013.”
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