Gloom descends on construction industry

Monday, 14 July 2008 12:00 AM

The latest state of the trade survey from the Federation of Master Builders (FMB) finds the construction industry is suffering the lowest levels of demand for a decade.

Furthermore, the results for the second quarter of 2008 reveal conditions in the building industry show no signs of improving in the near term.

The survey finds some 40 per cent of respondents are presently seeing workloads fall in comparison to the first quarter of 2008.

Moreover, 36 per cent of respondents expect their workloads to fall further in the third quarter of the year to be lower than those recorded in the second.

"What our survey shows is that builders are operating in an increasingly difficult market," said Brian Berry, director external affairs at the FMB.

"The rapid downturn in the house building sector is now making its mark on small builders with nearly 50 per cent of our survey respondents saying that they expect their workloads to fall over the coming months."

Nearly 50 per cent of respondents working in the new private housing sector expect their workloads to fall over the next three months.

This follows research from the Office for National Statistics (ONS), which show overall construction levels fell by 19 per cent in June alone.

There has also been a downturn in employment, with 18 per cent more firms reporting that their workforce decreased during the quarter two than said their employment increased.

Larger builders are also feeling the strain, with Bovis Homes, Barratt Developments, Redrow, Persimmon and Taylor Wimpey announcing over 5,000 job losses in recent weeks.

"Employment has significantly decreased over the last quarter, which is a huge concern not only for the building industry but for the wider economy," added Mr Barry.

"There is now growing evidence that small building firms are starting to make staff redundant. However, as in first quater the issue of the skills gap is still causing problems for firms lucky enough to be in the position to consider recruiting.

"There is still a lack of core trades such as skilled brick layers, carpenters, and plumbers and the problem is set to increase if the industry does not start thinking about apprentices and the next generation of builders."

Chris O'Toole

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