Building recovery under threat, warns FMB Cymru

The economic recovery in the Welsh SME construction sector is under threat from rising building costs and material shortages warns the Federation of Master Builders (FMB) Cymru.

Commenting on the results of the FMB’s State of Trade Survey for the first three months of 2014, Richard Jenkins, Director of FMB Cymru, said:

“Rising building costs and material shortages are causing serious concern in the building industry with 80% of SME firms expecting the situation to worsen over the next six months. Although our latest snapshot is the fourth successive quarter showing positive results for workloads, employment and enquiries, this could be undermined by a spike in prices and costs.

“Materials prices are generally around 10% higher across the board with small construction firms highlighting timber products such as sheet materials and timber fencing as being particularly expensive. The increase in the price of timber fencing is largely due to the severe storms that battered the UK during the winter.

“Added to this are concerns over the ready supply of particular materials such as bricks, which could scupper the ability of SME house builders to plug the shortfall in housing supply – this at a time when we need to rapidly increase the number of new homes. Small house builders report that brick manufacturers are asking them to wait until the beginning of 2015 for new orders of bricks and our members perceive this prolonged delay to be a decision to prioritise brick orders from large house builders. If this problem continues, SME house builders may be forced to build with alternative materials such as render or risk stalling sites for the rest of this year.”

Jenkins concluded: 

“Wales was the only part of the UK to build less new homes in 2013 than in 2012; this at a time when housing supply has been failing to meet demand. The Help to Buy-Wales scheme, launched in November 2013, has increased housing demand further still. We fear that small, local house builders are being frozen out of the market because land is too often released in big chunks, meaning that only large volume house builders can develop this land. We are calling on the Welsh Government to make it a condition that when land is released for development, a portion of that land is released in smaller tranches, making it feasible for local smaller builders to develop. We believe that in empowering our small builders, the demand for housing can be met, not to mention the wider community benefits using local SMEs will bring.”

FMB State of Trade Survey