Rising costs fail to dampen Welsh construction spirits

New statistics from the Federation of Master Builders (FMB) Cymru have revealed “strong growth” for Welsh construction SMEs during the final quarter of 2017.

This was the big takeaway from the FMB’s most recent State of Trade Survey – the only quarterly assessment of UK-wide construction SME performance.

According to the State of Trade Survey, rate of growth among Welsh construction SMEs quickened during Q4 2017 when compared to the previous quarter. Fewer construction SMEs foresaw an increased workload however, down from 41% to 38% in Q4.

To date, 87% of Welsh builders believe that material prices will increase over the next six months – up from 82% the previous quarter – while more than two-thirds (68%) of construction SMEs are struggling to hire bricklayers and 63% carpenters and joiners.

Fortunately, there was brighter news with almost two-thirds (61%) of construction SMEs expecting salaries and wages to increase over the next six months.

“Growth among Welsh construction SMEs has now risen for five consecutive quarters,” confirmed Ifan Glyn, Director of FMB Cymru. “Wales was the only home nation in the UK to experience a faster rate of growth in the final quarter of 2017 when compared to the three months to September.

“These results are particularly pleasing, and perhaps even surprising, given that rising costs and ever-worsening skills shortages continue to burden Welsh firms. However, there is certainly no room for complacency. The skills crisis is getting steadily worse and this is having a knock-on effect on rising salaries and costs.”

Brexit complicates matters further, as Mr Glyn was quick to acknowledge: “Although EU migrants only represent a small proportion of construction workers in Wales, we know that London is heavily reliant on these workers. Indeed, half of London’s construction workers were born outside of the UK.

“If London and the wider South East continue to suffer skills shortages, tradespeople from Wales may choose to work across the border after being tempted by the prospect of higher wages. It is therefore equally important for construction firms across the UK that the Westminster Government treads carefully and delivers a responsive and flexible immigration system to replace the free movement of people.

“Anything less will be a cause for alarm for the Welsh construction sector.”

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