Building Upswing Good New for Housing Supply

An upswing in builder workloads is good news for the housing market, which has been plagued by a lack of supply over recent years. Research from the Federation of Master Builders (FMB) showed workloads in the construction industry have increased for the first time since the economic downturn began.

An upswing in builder workloads is good news for the housing market, which has been plagued by a lack of supply over recent years. Research from the Federation of Master Builders (FMB) showed workloads in the construction industry have increased for the first time since the economic downturn began. The net balance for workloads, expected workloads and enquiries in Q2 was positive across most of the UK - a feat not seen 2007.

However, it wasn't all good news and the FMB claims there is cause for concern in Scotland. North of the border a net balance of -26 was recorded, indicating conditions had deteriorated for SME builders during the second quarter of the year.

Nevertheless, overall confidence is certainly starting to improve among SME builders. Brian Berry, chief executive of the FMB, said: "After one of the toughest and most sustained economic downturns since the Second World War, it is encouraging to see conditions may be easing for Britain's beleaguered builders. It is a testament to the resilience, work ethic and professionalism of SME builders, many of whom have had to cut their cloth accordingly and eat into their profits to maintain staffing and capacity in the hope that a better day would come."

Mr Berry is still keen to stress that the building sector is anything but out of the woods, claiming there is a long way to go to get back to pre-2008 levels of employment and output.  Consumer confidence is also relatively fragile and the FMB believes the government must work to consolidate gains and improve conditions. While many cite the Green Deal and Funding for Lending schemes as examples of how officials are helping to support the construction industry, Mr Berry states they are currently underperforming.

Builders aren't able to access the finance and new work promised, while public contracts "often remain unsuitably packaged" for small construction firms. On the other hand, Help to Buy is proving more successful, helping to attract buyers to new builds and stimulate construction. Nevertheless, if the UK is to increase is housing stock more needs to be done.

- Wednesday 10 July 2013

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