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Retrofit strategy key as sector contracts

The Federation of Master Builders has released its latest State of Trade Survey for Q3, which shows overwhelming support for a national retrofit strategy amidst rising costs and contracting growth.

The survey found that 74% of members are in favour of the UK Government introducing a long term plan to reduce energy consumption by making existing homes greener and more energy efficient, with this retrofit strategy key to bringing long-term growth.

Key facts:

  • 74% of small, local builders are in favour of retrofitting UK homes
  • Both workload and enquiries have decreased in Q3 2022 compared to Q2
  • 33% of FMB members report an increase in Q3 compared to Q2
  • 62% of FMB members have been impacted by a shortage of materials.
  • At least one third of FMB members are struggling to recruit carpenters/joiners, bricklayers and general labourers (43%, 38%, and 34%).
  • 90% of FMB members reported an increase in material costs
  • 88% of respondents expect material costs to increase in Q4
  • 76% of builders have put up their prices for work

Data from the survey reveals a contraction of workloads, enquiries and employment, with enquiries dropping into negative territory for the first time since 2013, excluding the pandemic years. Across the country, more builders are reporting a fall in enquiry levels, compared to those seeing a rise.

The current political turmoil and inconsistent economic policy has led to uncertainty within numerous sectors and companies have to adapt without knowing what the immediate future holds. The FMB warns that without clear political and economic direction, the industry will continue to face an uncertain future.

The survey also reveals that some 90% of builders are experiencing material cost increases, with 88% of respondents expecting prices to rise in the next quarter.

The recent material shortages, supply chain issues and difficulties finding skilled labour, are still factoring into delays for the majority of FMB members. Around 60% of builders report they have delayed jobs due to a lack of materials and 59% have delayed work due to a shortage of skilled tradespeople.

Members support the idea of a national retrofit strategy, believing it will create impetus for customer demand. With 28 million homes needing new insulation, windows, doors, solar panels, and new heating technology in order to hit government net zero targets, a strategy would be a welcome boost to builders.

The FMB State of Trade Survey, which is released quarterly, is the only survey of its kind to track the experience of small to medium-sized (SME) construction firms in the UK.

Brian Berry, Chief Executive of the FMB, said: “The fall in builders’ workloads and enquiries to a level not seen since 2013, discounting the turbulent market during the Covid pandemic is a worrying signal about the future prospects for the building industry. They reflect the overall economic situation that the UK finds itself in.”

Berry continued: “Small builders across the country need clear policies, and a degree of assurance so they can plan ahead. The current political uncertainly and its impact on the economy needs to be addressed quickly. Over 70% of members support a UK-wide retrofit strategy to make the existing housing stock more energy efficient. This is one of the best ways to boost both the economy and the industry, while also upgrading our homes in an energy efficient way.”

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