Nearly half (47%) of all Master Builder companies reported a fall in enquiries for new work at the end of last year leading to a 15% fall in workloads, according to the latest State of Trade Survey from the Federation of Master Builders (FMB), for Q4 2023.
Brian Berry, Chief Executive of the FMB said: “2023 was undoubtedly a difficult year for small building companies with falling enquiries and workloads starting to drop. Significantly, conditions for the repair, maintenance and improvement (RMI) sector, which had been the main driver for construction output, worsened for the first time.”
Berry continued: “The good news from our survey is the reported easing of material price rises with fewer Master Builder companies having to increase their prices for building work. However, with house building rates continuing to remain low and the recent fall in RMI activity an alarming downward trend is emerging for small builders, which will need to be addressed in the upcoming Budget.”
Berry concluded: “As we head towards the General Election, housing is increasingly becoming one of the major issues which will decide the outcome. With workloads and enquiries down, recruitment declining, and costs remaining high, the FMB survey is clear evidence that with the Chancellor set to announce his latest Budget in March, there is substantial need to reduce barriers to construction and provide financial support to SME construction firms facing tough economic conditions.”
The FMB State of Trade Survey for Q4 2023 found:
Market conditions
- There has been a decrease in total workload, enquires and employment over Q4 of 2023, in all sectors being worked on by small builders, including repair, maintenance and improvement.
- 47% of FMB members reported a decrease in enquiries.
- Workloads were down 15% on Q3 2023 in the final quarter of last year.
Skills
- Overall, difficulty in recruitment has slightly decreased, however over a quarter of members report a decrease in employees.
- 36% of members are struggling to hire carpenters with 34% struggling to hire bricklayers.
- Just under half of FMB members report that jobs are delayed because they are struggling to hire skilled workers.
Changes in prices and costs
- 63% of members report that material costs increased in Q4 2023, down from 71% in Q3.
- The impact of increased outgoings has led to 66% of members increasing the prices they charge, with just under half reporting that the business in on track to make a loss or fall below expected margins.
- One in five report that they are restricting hiring new staff as a consequence of increased outgoings.