Third of small builders let staff go

Grant Prior 11 years ago
Share

Nearly a third of Britain’s small building firms have shed staff since the start of the year as workloads fall at their fastest rate since early 2012.

The latest Federation of Master Builders trade survey for the first quarter of 2013 makes bleak reading.

And things could get even grimmer for contractors with a Construction Products Association prediction of a £2bn drop in workloads this year.

Brian Berry, Chief Executive of the FMB, said: “Last year was a tough one for our members, but there were some encouraging signs in the final quarter of 2012 that the industry may be turning a corner.

“These latest survey results however paint a bleak picture, and our members are telling us that they are faced with the unenviable choice of putting up their prices or laying off staff.”

Small builders are being squeezed as workloads continue to fall, costs keep rising and credit conditions remain extremely tough.

The first three months of this year have seen 30% of firms shed staff.

Key indications from the survey include:

Overall SME workloads decreased at a substantially faster rate in Q1 2013 than in Q4 2012. The number of respondents reporting a fall in workloads climbed (39% vs 31%), while those indicating higher levels of workloads declined (18% vs 22%);

Output prices, wages and salaries and material costs are all predicted to go up in the coming six months: Although in the case of material costs, the rate of increase is expected to slow marginally, as fewer firms anticipate increasing their prices (74% vs 77%).

SME employment continues to slide: Current employment levels are decreasing, with 30% saying they have shed staff in the first part of this year, up from 27% in the previous quarter;

Berry said: “Our members have for years eaten into their own profit margins in a bid to maintain capacity – but that cannot continue.”

Latest forecasts from the Construction Products Association predict output is set to fall by more than 2% this year following an 8% contraction in 2012.

A recovery is anticipated in the medium-term with growth of 1.9% in 2014 and 3.8% in 2015.

Noble Francis, Economics Director of the association, said: “The industry lost £9 billion of activity last year and these latest forecasts anticipate a further £2 billion loss in 2013.

“This fall is primarily due to the lack of private sector investment and the continuing bite of public sector spending cuts. Conditions were exacerbated by poor weather during the first quarter.

“Of most concern is the fall in output in private commercial, the largest construction sector, which fell 10% last year and is estimated to fall a further 7% in 2013.

“Despite this, we are already encouraged by signs of improved market activity, primarily driven by private housing and infrastructure.

“We anticipate that government policies such as Help to Buy will boost private housing, which is expected to rise 19% in just two years.

“Infrastructure activity is set for 7% growth in 2013, boosted primarily by rail construction such as Crossrail, Europe’s largest project, and station refurbishments around the country.

“Overall, 2013 is anticipated to be extremely challenging. From 2014 prospects are brighter for the industry, but the key risk is the extent to which government announcements feed through to activity on the ground.”

Latest news

Morgan Sindall to build former Willmott Dixon leisure job

New contractor appointed on
15 hours ago

Graham consortium wins £400m Manchester job

Equitix consortium to now work up DBFO plans for University of Manchester’s Fallowfield Campus
12 hours ago

Keltbray looking to sell infrastructure business

£378m turnover rail, energy and highways business up for sale
22 hours ago

Innovative viaduct building method used for first time in UK

HS2 contractors will build nine viaducts in Delta Junction using special cantilevered process
23 hours ago

Unite buys London site to fast-track 444-bed student scheme

£800m to be spent on London development pipeline in next five years
23 hours ago

CITB awards £2.5m of contracts to management consultant

Three outsourced deals in the last year for "project leadership and management consultancy"
23 hours ago

Village centre approved for 6,000-home new town plan

Hampshire's Welborne Garden Village plan has been in the pipeline for two decades.
22 hours ago

£3m fine after cherry picker demolition death

Court rules after tragedy during decommissioning of gas rig
23 hours ago

BAM plans wave of job cuts at UK Construction arm

Co-op Live arena plunges Bam Construction to £19.5m first-half loss
2 days ago

Robot tunnel builder goes into administration

Hypertunnel was hoping to revolutionise how underground structures are built
2 days ago

Wates to build £86m Guildford Council housing scheme

40% of the 248 homes will become council homes under partnership deal
2 days ago

“Scrap CITB” say three quarters of construction firms

Payroll giant Hudson Contract calls for CITB to be absorbed into new Skills England training body
2 days ago

£100m Prestwich Village revival approved

Vinci and Willmott Dixon in chase for Muse-led regeneration scheme
2 days ago

Carbon negative asphalt aggregate trialled on M11

Skanska and Tarmac test CO2 absorbing aggregate material on stretch of Essex motorway
2 days ago

Father and son sentenced over covid construction loan fraud

Bristol builders given suspended jail sentences over bogus Bounce Back Loans
2 days ago

Beck Interiors files administration notice

Supply chain has suffered delayed payments from £139m-turnover luxury fit out specialist
3 days ago

Green light for York Central civil service office hub

£60m office project accelerates York Central goods yard redevelopment
3 days ago

Blenheim House Construction enters administration

Administrators looking at options on present projects
3 days ago

Profits rise at Esh Group with more to come

Contractor confident about year ahead as market conditions move in right direction
3 days ago

Piling specialist Van Elle sees housing orders rise 30%

Mark Cutler says firm on course to deliver 10% annual sales growth
3 days ago

HS2 to spend £100m shutting sites where work never started

Remediation of sites no longer needed for cancelled Phase 2 will take three years
4 days ago

Willmott Dixon wins £61m deal for new Army dog unit

Contractor to revamp Kendrew Barracks in Rutland
3 days ago

Stockport advances 4,000-home Town Centre East plan

Council seeks consultants to steer plan for 280-acre area in the city
3 days ago

ISG sale imminent as buyers set-up UK holding company

South African nutrition entrepreneur and Australian partner primed to take over
4 days ago

CR Construction wins £210m Manchester towers

Construction to start next year on four blocks ranging from nine to 34-storeys
4 days ago

Southern Housing to rationalise supply chain following merger

Firms put on alert for £1.7bn construction framework renewal
4 days ago

Decision delayed on 52-storey Isle of Dogs tower

Hong Kong developer plans 460 flats block next to Millwall Inner Dock
4 days ago

Go-ahead for £850m North London estate rebuild

Flagship Edmonton housing estate redevelopment will deliver 2,000 new homes
4 days ago

Mace lands £184m Oxford Science Park contract

Contractor to build trio of laboratory and office buildings
5 days ago

Worker paralysed in 30ft fall during electricity pylon demolition

Specialist firm fined £240,000 after court hears linesman attached lanyard to a loosened steel section
4 days ago

Contractor services