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Construction workforce reduced ahead of uncertain political future

Following their State of Trade Survey for the third quarter of 2019, the Federation of Master Builders have concluded that small-to-medium enterprises in the construction sector are unwilling to hire new workers, and are actively reducing the sizes of their workforce, as a consequence of political uncertainty.

Specifically, the survey showed that a proportion of just 15 per cent of SMEs in construction reported a growing workforce, showing a four per cent decline down from the previous figure of 19 per cent, while 23 per cent of businesses stated that they were actively reducing the size of their workforce, with this figure having increased from 21 per cent.

Unsurprisingly, this reduction in construction workforces is a direct consequence of individuals within the sector predicting a weakened pipeline in the not-too-distant future, with 19 per cent predicting lower workloads after just 12 per cent made this prediction in the previous quarter.

The Chief Executive of the FMB, Brian Berry stated: “Builders are tired of the continued political uncertainty blighting the UK economy. Stagnating staffing levels is a concerning sign, and if this trend continues, we could see the capacity of the industry shrink at a time when builders are needed more than ever.

“Skilled workers are scarce in the construction industry, and it is critical we keep people employed in the sector. The fact that SME firms are having to lay people off and are holding off taking new people on is worrying.”

“Small building companies are also having to contend with eye-watering material prices, and these are set to continue to rise.

“This coupled with continued wage inflation, driven by skill shortages, is leaving many firms to have unsustainable profit margins. This will ultimately mean less money for SMEs to invest and grow for the future, and ultimately could see some firms having to close.

“The Government needs to carefully consider the impact of new regulations that will impose extra costs and cash flow restrictions on the sector such as Reverse Charge VAT.”

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