Forty-nine percent of small builders have had a negative impact on their profit margins in the last quarter, the most recent State of Trade Survey from the Federation of Master Builders (FMB) reports.
The FMB warns that without clear political and economic direction, during the summer under the caretaker government in Westminster, the industry will face an uncertain future.
The latest survey for Q2 2022 found:
Impact on net profits
- 49% of small, local builders have seen a negative impact on profit margins owing to the current economic climate.
Market conditions
- 71% of small builders have delayed jobs because of a lack of materials.
- 61% of FMB members have delayed jobs due to a lack of skilled tradespeople.
- Significantly fewer FMB members report a rise in enquiries, across all areas of work, compared to the last quarter.
- Housebuilding enquiries are down significantly, tracking in negative territory for the first time since the pandemic.
Skills
- 42% of FMB members are finding it difficult to hire bricklayers, up 2% on last quarter.
- 42% of builders are struggling to hire carpenters/joiners, down 3% on last quarter.
Prices
- 98% reported an increase in material costs in Q2 2022.
- 95% of respondents expect material costs to increase in Q3 2022.
- 81% of builders have put up their prices for work.
Brian Berry, chief executive of the FMB, said: “The statistics in this quarter’s FMB State of Trade Survey make for some grim reading. The industry appears to be at a turning point, and without any movement from a government stuck in paralysis, things will only get worse.
“The new government in September must hit the ground running and deliver ambitious solutions to stabilise the economy. One such solution might be to remove VAT on repair, maintenance and improvement work so that cost savings can be passed on to the consumer.
“The FMB’s survey also shows that long-term issues persist with materials and skills shortages continuing to delay building work. These issues and rising economic uncertainty don’t leave small, local builders in a good position.”
>>Read more from the FMB here.
