House building propels SME construction sector, says FMB

House building is leading the growth in the SME construction sector but the industry has a long way to go to recover to pre-recession levels, according to the latest research from the Federation of Master Builders (FMB).

Results from the FMB’s State of Trade Survey for Q3 2014 show SME workloads growing across most sectors, with the strongest growth coming from private house building.

Brian Berry, chief executive of the FMB, said: “We are at last seeing strong, consistent growth in workloads for SME house builders but the building industry is still a long way from being ‘home and dry’. The private housing market is recovering from a very low base after a recession which saw house building fall to record lows. Half of all SME house builders went to the wall or were forced to diversify into another area of construction.”

Berry added: “In the late 1980s, two-thirds of all new homes were built by small local builders but by 2010, this had dropped to just one third. Current statistics reveal that SME house builders now deliver only a quarter of all new homes. Since the recession hit, a major factor in this has been the serious difficulties SME house builders experience in accessing bank finance, which show little sign of improving in the short term.”

Berry concluded: “The threat of serious skills shortages is also becoming increasingly apparent. Our latest research shows 41% of SME construction firms are now reporting difficulties in recruiting bricklayers – an increase of 7% when compared to three months ago. Carpenters and joiners are also proving difficult to come by with 41% of firms reporting difficulties finding these tradesmen, an increase of 15% when compared to the second quarter of this year. The construction industry has lost 350,000 people since its peak before the recession and this will have a knock-on effect for many years to come. Although the SME sector has entered a period of sustained growth, the legacy of the most deep and protracted recession we have ever experienced has left us with a rocky road to genuine recovery.”

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