The FMB State of Trade Q4 2024 survey shows that issues with skills and costs persist throughout the construction sector.
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The Federation of Master Builder’s latest State of Trade survey shows that 35% of members report lower workloads
This accounts for a drop of 11% in general workloads in the final quarter of 2024.
Enquiries also dropped 23%, after a 9% drop in Q2 and a 13% drop in Q3.
25% of members report a decrease in employee count in the State of Trade Q4 2024 survey
Despite recent calls for recruitment support, the workforce has dropped by 8%. 23% of members reported a decline in Q3, and 24% in Q2, showing a worrying trend.
Still, the rates are not as high as in Q1 2024 where 28% of members reported a decline in employees.
Furthermore, more members struggled to hire carpenters in Q4 2024 at 37%, up from 35% in Q3. 28% struggled to hire bricklayers in Q4, and 33% report difficulty hiring general labourers, a 1% improvement on the previous quarter.
Struggles to hire roofers affected 17% of members, and painters and decorators affected 15%. Of all the members, 42% said that shortage of skilled tradespeople resulted in delays to their jobs.
Costs and process were also covered in the survey, with 67% of members saying that costs were causing them to raise their prices for services, 52% reported lower-than-expected business profits or financial losses, and 35% said that they had to restrict recruitment plans due to costs. 8% said that their business viability was compromised, and are at risk of closing.
“A crucial opportunity to re-energise efforts”
Brian Berry, chief executive of the FMB said: “The latest State of Trade Survey, looking at SME construction activity during the last three months of 2024, found that small building companies were continuing to battle against a deteriorating economic climate with workloads down by 8% and enquiries down by an alarming 23%. These falls are concerning, as any change in activity in the building repair, maintenance and improvement sector is usually a first warning sign that consumers are needing to tighten their belts.
“The State of Trade Survey also reveals that 64% of small building companies reported an increase in material costs with 25% reporting a reduction in employment numbers. Ongoing shortages in some of the key trades such as carpenters, bricklayers and plasterers meant that 42% of building companies experienced job delays due to skills shortages. At a time when the Government is focused on economic growth, the Spring Statement in March will be a crucial opportunity to re-energise efforts.”
Ifan Glyn, FMB Cymru director, said: “Our members in Wales are facing significant challenges. With the cost of doing business rising, passing these costs onto customers is no longer a sustainable solution. Companies will soon be forced to absorb these costs to stay competitive, but this can only go so far before we start seeing layoffs, cessation of apprenticeships, a reduction in projects, and, in some cases, companies closing their doors.
“If the Welsh Government is serious about delivering on its commitments to build more homes and improve the existing housing stock, the last thing we need is a sector forced into survival mode. To succeed, we need a confident, thriving sector that is fully supported by Government. This means increasing, not cutting, the apprenticeship budget, reforming the planning system, ramping up investment in improving the energy efficiency of homes, to name but a few. With the 2026 Senedd elections on the horizon, the Welsh Government is in delivery mode. My concern, however, is that the challenges we face are so deep-rooted that quick fixes will not be enough to overcome them. We remain committed to working constructively with the Welsh Government and our industry partners, but it is clear that solving these issues will take a sustained effort over a long period of time.”
Gordon Nelson, FMB Scotland director, said: “The last three months of the calendar year typically don’t bring the best of results for the building industry in Scotland. The shorter days and inclement weather combine to dampen builder’s spirits and stave off potential clients from enquiring about building works.However, examining the results from across all four nations of the UK in the FMB’s Q4 State of Trade Survey for 2024, it is Scotland that comes out on top. On the two key measures of overall workload for builders and enquiries for new works, there is a clear contrast between the welcome results in Scotland compared to the rest of the UK.
“In April the rise in employer National Insurance contributions combined with increases to the national minimum and living wage will add more costs for our builders who continue to grapple with material price increases. It’s already tough for employers in the building industry to recruit the next generation of master builders, so these increased costs are not welcome. As we approach spring, we await to see if consumer confidence holds up. The early spring is a critical time of year for builders who deliver home improvement works such as extensions and renovations. So we eagerly await the results from our next survey.”
Gavin McGuire, FMB Northern Ireland director, said: “The final quarter figures for the SOTS survey for NI, showing the neutral growth and enquiries data reflects members feedback on the current market. During what can traditionally be a quieter period, the uncertainty around the economy and increased NI contributions affecting costs, have been mentioned by some clients, concerned with going ahead with projects.
“With a new Housing Strategy launched by the Executive towards the conclusion of 2024, FMB members are keen to see action to assist, invigorating the new home market and industry. Coming into 2025 we need to see new efforts to resolve the crippling infrastructure issues around water, electricity supply and a under performing planning system to help the Industry move forward.”
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