Consumer demand for building work in the UK remained resilient in the three months following the vote to leave the European Union, new figures show.
But developers must not be complacent as while the construction industry is like a weather vane for the property market as there are still challenges, according to a new report from the Federation of Master Builders (FMB).
The biggest challenge is a lack of skilled workers with almost two thirds of smaller builders struggling to find bricklayers and over half, 55%, finding it hard to find enough carpenters and joiners.
Brexit could still have an effect as it is reckoned that 12% of the workforce in the construction industry are not British and come from other EU states with the ability to recruit from abroad likely to be hampered by new immigration policies due to Brexit.
‘Ongoing workloads for construction SMEs remained remarkably resilient in the months following the referendum vote, suggesting that consumer demand, which accounts for the bulk of SME work, has held up far better than anticipated,’ said Brian Berry, chief executive of the FMB.
He explained that some of the other key indicators of SME activity, such as employment levels, anticipated workloads and new work enquiries, are all positive, albeit showing slowed growth compared to the previous quarter.
‘If we all agree that construction is a weather vane industry, and demand for home improvement and new build homes an important gauge of consumer confidence, then our results chime with the cautious positivity demonstrated across construction and the wider housing market,’ Berry pointed out.
‘That being said, construction bosses will be taking nothing for granted. Growth has softened compared to the buoyant first half of the year and some parts of the UK have gone into decline. In particular, London is flat-lining which is concerning given that it is typically one of the strongest markets for construction SMEs. Our feeling is that the construction skills shortage, which we know is particularly pronounced in London and the south east, is starting to bite,’ he added.
He also pointed out that the struggle to find skilled workers in the building trade highlights a different potential consequence of Brexit which is the possibility that there will be a less flexible workforce.
‘Given that the skills gap is only expected to grow over the next decade, it’s vital that talented tradespeople continue to come to the UK. For this reason, we welcome the Government’s U-turn on requiring companies to publish data on the percentage of foreign workers they employ. Such a move would send completely the wrong message to foreign workers currently living and working in the UK and those who might consider coming here,’ Berry added.