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News - 11 October 2013

Rising costs threaten building recovery

The Federation of Master Builders (FMB) has warned that increases in material and labour costs could pose a serious threat to the fragile recovery in the building industry.

In the FMB’s State of Trade survey, their member firms showed a net balance for workloads, expected workloads and enquiries in the third quarter of 2013 was positive across nearly all parts of the UK for the second quarter in a row.

In particular, the private new build and residential repair and maintenance sectors saw a marked improvement, and overall 42% of small builders saw their workloads increase.

However, material costs, wages and salaries are all expected to continue rising over the next six months, with the result that many building companies may have to put up their prices.

Brian Berry, Chief Executive of the FMB, said:” Construction SMEs have battled to maintain staffing and capacity while trying to keep prices competitive. Material costs have remained high throughout 2013, and further increases could snuff out this recovery in its infancy.”

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“The Government’s ‘Help to Buy’ scheme is having a positive impact on the housing market, helping create demand for more privately built houses which is having a knock-on effect for the home repair and refurbishment sector. However, limited access to finance, the costs of regulation and a shortage of small sites for development are the key barriers for many smaller house builders.”

If you need any help and advice for your business on the implications of central and local Government Funding initiatives and the construction industry, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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