Welsh builders experience summer boom, says FMB Cymru

Welsh small to medium-sized (SME) construction companies saw a marked growth in workloads in the third quarter of 2019 according to the Federation of Master Builders (FMB) Cymru.

Key results from the FMB’s latest State of Trade Survey for Q3 2019, which is the only quarterly assessment of the UK-wide SME construction sector, include:

• Welsh construction SME workloads remained positive in Q3 2019 more than reversing the drop seen in the previous quarter;

• Carpenters overtake bricklayers as the trade in shortest supply with over half (56%) of construction SMEs struggling to hire carpenters and joiners and 54% struggling to hire bricklayers;

• 86% of builders anticipate that material prices will rise further in the next six months, slightly up from 77% in Q2 2019; and

• 56% of SME construction companies expect higher salaries and wages over the next 6 months up from 51% on the previous quarter.

Barry builders Precision Construction say these reports are in line with their experience on the ground, having had a positive summer with the company landing significant new commercial development and property maintenance contracts.

Ifan Glyn, Director of FMB Cymru, said:

“Welsh builders have had a very busy summer despite continued economic and political uncertainty. However, the high demand for building work has seen skill shortages continue to intensify. Our survey shows that over half of building firms are struggling to find carpenters and bricklayers to hire. If builders are not able to find the skilled tradespeople they need, it will seriously impact their capacity to build.”

Glyn continued:

“While workloads remain strong, the future remains uncertain with Brexit still looming over the economy. If a deal is passed and we have an orderly Brexit, I would hope this positive trend continues, however, if we leave without a deal conditions could deteriorate quickly. The construction industry is usually a barometer for the wider economy so if we see a wider economic shock, this could have a big impact on building activity. We therefore urge politicians in Westminster to come to an agreement on the Withdrawal Bill, so we can all move on.”

Glyn concluded:

“Builders are also feeling the pressure of extra costs on their business with 86% of builders expecting material prices to rise over the next six months and 56% expecting to pay higher wages. Another major issue that doesn’t help matters is that of poor payment practices. The amount of time it takes many of the major contractors to pay their supply chain is frankly appalling. This has a detrimental impact on the cash flow of SMEs and subsequently their ability to invest. Steps have been taken by Welsh Government to improve things but they are limited in their scope. Bolder steps are required to ensure that major contractors pay their supply chain on time.”