Workloads fall for SME construction companies for first time in six years, according to research

May 2019

Workloads fall for SME construction companies for first time in six years: A report into the current state of the construction industry has revealed 29% of construction SMEs have reported a reduction in workloads in the latest quarter, compared to 13% at the end of 2018.

This marks the first time in six years that workloads have fallen – ending a period that enjoyed 23 consecutive quarters of growth. 

The State of Trade Survey commissioned by the Federation of Master Builders (FMB) also noted that almost half the SMEs polled (49%)  had reported no changes to workloads, just marginally down from the previous quarter, when it was 50%.

Feeling optimistic for the future

Compared to at the end of 2018, more construction SMEs are feeling increased optimism for the future, with 41% reporting expectations have strengthened and expecting workloads to increase. This compares to a third (33%) who felt the same at the end of last year.

SMEs predicting reduced workloads for the future fell from 19% at the end of 2018, to 16% this quarter.

The report also highlighted a reduction in skills shortages, which may be down to there being less competition for work because of the reduced workloads.  Looking at skills shortages within the industry, respondents revealed hiring a bricklayer was most difficult with 64% saying they had faced challenges, while 59% had struggled  to find carpenters for construction jobs.

Almost nine in ten (88%) SMEs said they expect the cost of materials to increase over the next six months. The poll also indicated that 71% of SMEs expect wages to increase too – up five percentage points since the end of 2018. 

It is thought that Brexit uncertainty has played a significant role in the fall in workloads.

Brian Berry, chief executive of the FMB said: “These results are also very much in line with recent stats from the ONS and PMI data, all of which point to a wobble in the construction industry. Consumers and businesses alike are understandably putting off large investment decisions while the never-ending Brexit negotiations rumble on.”