A THIRD OF BUILDING FIRMS MAY HAVE TO AXE STAFF

THE decline in the construction industry is continuing apace as the Tory-Lib Dem Government’s austerity experiment continues to fail. Now the Federation of Master Builders (FMB) has warned that a third of all small to medium-sized building firms fear they will have to reduce staffing levels this year.

The pessimistic outlook for the building industry comes from the FMB’s latest State of Trade Survey. These showed that builders’ workloads decreased last year and are expected to keep falling, at least for the first half of 2013. Many firms said they may have to introduce price rises as overheads continue to eat into profit margins and the likelihood of lay-offs looms large.

The FMB are calling for a reduction in VAT on building work to make homes more energy-efficient to help provide an immediate boost for small builders. This would boost the economy, helping householders save money on their fuel bills and reduce carbon emissions.

Overall the FMB’s latest State of Trade Survey results showed:

 Workloads continued to decrease in all sectors: The pace of contraction slowed down in the housing sectors, but the opposite was true for non-residential parts of the industry.

 The composite indicator continues its downward trend across all regions and devolved nations: Across the board all 12 regions and devolved nations experienced negative indicators; with just three (Wales, Northern Ireland and London) seeing their rate of decline slowing down. The downward trend was particularly pronounced in Scotland, the North of England, the East Midlands and the South West.

 Output prices, wages and salaries and material costs are all expected to go up in the coming six months: Although in the case of output prices and wages and salaries the vast majority of firms stated no change at 60 per cent and 77 per cent respectively.

 SME employment continued to decline in Q4: The overall expected employment levels are predicted to fall at a slower rate over the next six months and specialist builders reported a positive balance for first time since the first quarter of 2011.

Brian Berry, the FMB’s Chief Executive, said: “The construction industry is on a knife-edge. If the Government does not act swiftly and decisively to support SME builders – the backbone of the British construction industry – then we will undoubtedly see more firms going to the wall and job losses across the board in 2013.”