Small construction firms enjoyed rising workloads in the first quarter of 2017, despite growing concerns over the cost of labour and materials, according to the Federation of Master Builders (FMB).
Key results from the FMB’s State of Trade Survey for Q1 2017, which is the largest quarterly assessment of the UK-wide SME construction sector, include:
UK construction SME workloads increased more significantly than at any time since Q2 2016 which was the quarter immediately prior to last June’s EU referendum.
Brian Berry, Chief Executive of the FMB, said: “The first three months of 2017 proved to be very positive for construction SMEs, which reported strong growth, underpinned by continuing resilience in the home improvement sector. Workloads rose in every part of the UK, with particularly positive results in the devolved nations. Given the concerns that wider consumer confidence might be weakening, it’s encouraging that smaller construction firms aren’t sensing any drop-off in demand for their services.
“Although only 20% of construction products and materials used in the UK are imported, the depreciation of sterling since the referendum last June has seen material prices shoot up – with 85% of builders predicting further rises – this pressure on margins looks set to continue. Such cost inflation presents clear challenges to the profitability of smaller building firms and in many cases, builders will be forced to pass these price increases onto their customers.”