Scottish builders bounce back
Scottish construction firms enjoyed strong growth in the first quarter of 2018, according to the Federation of Master Builders (FMB) Scotland.
Key results from the FMB’s latest survey, which is the only quarterly assessment of the UK-wide SME construction sector, include: • In terms of workloads, expected workloads and enquiries, the overall indicator for the performance of Scottish construction SMEs, rose 19 per cent in Q1 2018 compared with the previous quarter, to +7 per cent; • More construction SMEs predict rising workloads in the following three months, up from 38 per cent in the previous quarter to 49 per cent in Q1 2018; • 90 per cent of builders
reported increasing material prices in Q1 2018 – this is the highest reading on record; More than half (58 per cent) of construction SMEs are struggling to hire bricklayers and 55 per cent are struggling to hire carpenters and joiners; • Two-thirds (66 per cent) of construction SMEs expect salaries and wages to increase during the next six months, up from 62 per cent in the previous quarter. Gordon Nelson, director of FMB Scotland, said: ‘Some of these results are all the more welcome given that the sector is up against considerable headwinds being created by rising material costs and the scarcity of skilled tradespeople.
‘That being said, construction bosses will be taking nothing for granted as there are stormy waters ahead for Scottish construction SMEs. The introduction of new income tax rates and bands, which came into effect in Scotland in April, means that almost half of the population are paying more income tax now than their counterparts south of the border. The prospects of many construction SMEs are determined by levels of consumer confidence and spending power. We will wait with baited breath as many Scottish home owners adjust to how the new tax rates impact on their household budgets. The tax rates may well impact how willing home owners are to commission projects such as a new kitchen, bathroom or extension – the life blood of the SME builder. This may stifle the growth experienced in the first three months.’