Small builders still in recession

The FMB says that its survey of members’ workload is the only one in the industry that focuses on construction SMEs.

The latest survey showed that members’ workloads continued to decline in Q1 2012, indicating that the sector has now been in recession for four years. The outlook for the next quarter has improved since the end of last year, with more than twice as many firms (27%) anticipating an increase in overall workloads, with just over one-third expect a decline. However, they are expected to fall again on balance.

Chief executive Brian Berry said: “Social housing new build workloads are at their worst since 1999 when the FMB’s State of Trade Survey records began. Around 66% of building companies reported lower workloads, a marked increase from 47% at the end of 2011. The private new housing sector fared little better with around 55% of firms indicating that workloads had fallen in the first three months of 2012, compared with 45% in the last three months of 2011."

He added: “The fact that workloads for small house builders are at an all time low is very worrying given the nation’s chronic shortage of affordable housing. Although the Government has introduced a number of promising initiatives to try and help the industry, support tends to be awarded to the large volume house builders meaning SMEs still miss out. The industry has lost around 69% of its smaller firms since the late 1980s and will lose even more of them if the Government and local authorities continue to drive them out of the market with the additional burdens of red tape and financial contributions that they are expected to pay."

Mr Berry concluded: “What is really worrying is that our survey shows that the SME building sector has now been in recession for four years. These dismal results for small builders demonstrate the length and severity of the recession in the construction sector not helped by the fact that 84% of firms expect building materials costs to increase over the next six months.”

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