SMEs in the UK construction industry have benefited from the eighth month of consecutive growth across this sector. This positive news was reported in the latest Construction Trade Survey focusing on the first quarter of 2015.

Large, small and medium-sized construction businesses in different fields have welcomed an increase in output, with further expansion expected throughout the year.

Dr Noble Francis, Economics Director at the Construction Products Association, said: “This momentum is set to continue, as it was in the private housing and commercial sectors that contractors registered growth in order books in Q1. Specialist contractors and SMEs also reported a noticeable upturn in new enquiries in the quarter.”

Is this growth being overshadowed by rising costs and skills shortages?

Despite this upturn, businesses in the construction industry are still facing a number of problems and limitations. While an increase in orders and enquiries has led to much confidence for the months ahead, negative issues such as rising costs and skills shortages have still been hindering progress.

Uncertainties over the general election result and what this will mean for the construction industry have also led to feelings of instability.

Stephen Ratcliffe, Director of UKCG, the primary association for British contractors and their supply chain partners, hopes that the recent election result will help to minimise any impact on work pipelines across the UK.

However he stressed the need for improvement, saying:  “Rising costs continue to reflect skills shortages, and the need to focus on recruiting and training new people into the industry.”

Adding to the discussion, Richard Beresford, Chief Executive for the National Federation of Builders, warned construction businesses to think forward when agreeing on pricing.

He said: “Companies are finding that prices agreed during leaner times have risen and are eroding profits, despite a rise in orders.

“With the industry entering a growth period, companies must take a longer-term view when setting prices to ensure their survival.”