Forty-four percent of Master Builder companies have reported in the first three months of 2024 that their business is on track to make a loss or fall below expected margins, with an increase in material costs over the past quarter seeing sixty-five percent of members reporting that they have needed to increase prices, according to the latest State of Trade Survey from the Federation of Master Builders (FMB), for Q1 2024.
Ifan Glyn, Cymru Director of the FMB said: “Last year was challenging for our members, and the picture for the opening quarter of 2024 paints a similar picture with enquiries in decline and increases in costs.”
Glyn continued: ‘With a general election around the corner, we are urging the political parties to help the sector and boost sustainable growth by implementing the proposals in our recently launched manifesto, ‘Growth from the ground up’. This is a plan which includes positive recommendations such as a temporary cut in VAT for home improvements work, and the introduction of a national scrappage scheme to help builders trade-in their carbon emitting vehicles for greener alternatives.”
Glyn concluded: ‘We need to build more houses and improve the energy efficiency of our existing homes to reach net zero. The importance of tackling these challenges go far beyond our sector, but they can only be achieved if we have a vibrant and sustainable construction industry that is supported by Government policy. We look forward to working with the new UK Government and the existing Welsh Government to this end.”
The latest survey for Q1 2024 found:
Welsh Market Conditions
- Wales witnessed a significant decrease in overall workloads, though slightly less significant than in Q4 2023, of -27% compared with -28% previously.
- There has been a continued decline in enquiries, though less severe than the previous quarter, with an improvement from -33% to -20%, however still indicating a challenging picture ahead.
The FMB State of Trade Survey for Q1 2024 found:
Market conditions
- There has been a very moderate increase in total workload and enquires, but numbers are still negative, reflecting the same metrics seen in 2010 to 2013 when the country was buffeted by austerity measures.
- Employment over Q1 of 2024 has remained stable and matches similar figures seen in 2010 to 2013.
- 44% of FMB members reported a decrease in enquiries.
- Workloads were up 6% on Q4 2023.
Skills
- Overall, difficulty in recruitment has slightly decreased, with the exception of general labourers who are more difficult to hire (28% struggled to hire them compared to 24% last quarter).
- 33% of members are struggling to hire carpenters.
- 28% are struggling to hire bricklayers, which has dropped considerably from 35% last quarter.
- Over a third of members report that jobs are delayed because they are struggling to hire skilled workers.
Changes in prices and costs
- 69% of members report material costs increased in Q1 2024, up from 63% in Q4 2023.
- The impact of increased outgoings has led to 65% of members increasing the prices they charge, with 44% reporting the business in on track to make a loss or fall below expected margins.
- More than a quarter report they are restricting hiring new staff as a consequence of increased outgoings.
