Material price increases holding back recovery for small builders, says FMB

Work for builders in the repair, maintenance and improvement sector has seen a 5% increase in the three months to April 2021, but the national construction materials shortage risks undermining builders’ ability to build, says the Federation of Master Builders (FMB) in response to the Office for National Statistics (ONS) construction output data, which was released on 14 June.

Construction output fell 2.0% in April 2021 after following a particularly strong increase in March (5.8%).

The figures showed that output now stands slightly above its pre-pandemic February 2020 level. New work continues to be subdued but the level of repair and maintenance is stronger.

However, the level of construction output in April 2021 remains 0.3% above the February 2020 pre-pandemic level, while new work was 3.4% below the February 2020 level, with repair and maintenance work remaining 7.1% above the February 2020 level.

In contrast to the monthly fall, construction output grew by 5.1% in the three months to April 2021 compared with the previous three-month period, because of a 5.2% increase in new work and a 4.9% increase in repair and maintenance.

The increase in new work (5.2%) in the three months to April 2021 was because of growth in all new work sectors apart from private industrial, which fell by 3.6%. The largest contributor to this growth was private commercial new work, which grew by 7.4%.

The increase in repair and maintenance (4.9%) in the three months to April 2021 was because of growth in non-housing and private housing repair and maintenance, which grew by 6.2% and 6.6% respectively.

Commenting on the statistics, Brian Berry, chief executive of the FMB, said: “The fact that construction output in April was 0.3% above its pre-pandemic levels points to encouraging signs for the industry’s recovery. However, it’s clear that the shortage of construction materials, and rising prices, are impacting small builders most severely and threatens many businesses’ survival as we emerge from lockdown.

“The latest FMB State of Trade data that shows 93% of builders reported material price increases in Q1 of this year. Against the backdrop of high levels of inquiries for building work, it’s imperative that smaller businesses have the same access to materials as the larger firms during these difficult times.”