Small building businesses threatened by increased costs and supply issues

The Federation of Master Builders believes the recovery of the building sector is being hampered by the impact of rising building costs and a shortage of materials.

While the demand for new houses and home repairs has increased across the UK – especially in the aftermath of stormy weather conditions earlier this year – small construction firms are said to be struggling with hiked supplier prices and delays on orders.

These fears were expressed following the findings of the FMB’s latest State of Trade Survey – a quarterly analysis of trends in the building market such as workload, costs and employment.

Increased workload undermined by hike in costs

In reaction to the survey results, Brian Berry, Chief Executive of the FMB, said building businesses are anticipating further problems in the coming months. Despite there being positive figures in terms of workload, employment and enquiries, there is a fear that this could be undermined by increased prices.

Mr Berry 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.

“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.”

 Shortage of building materials

While there is a huge demand for the construction of new homes, SMEs have been having problems ordering the required materials.

Mr Berry added: “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.”

Are you dealing with these issues as a small house builder? What do you think needs to be done to help SMEs? Tweet us @theinsuranceoct