FMB NEWS
STATE OF TRADE SURVEY FROM FMB REVEALS ALMOST HALF OF NORTHERN IRELAND BUILDERS HAVE REPORTED A SQUEEZE ON PROFITS...
Builders’ profits fall as economy falters, warns FMB NI
B uilders are feeling the pinch, seeing their profits tumble as the pressures in the economy mount. Small, local builders are facing a few uncertain months ahead with growing concerns about insolvencies, increasing inflation, the knock-on effects of the war in Ukraine and a customer base looking to tighten its belts. In the most recent State of Trade Survey from the Federation of Master Builders for Q2, 2022, a staggering 49% of small builders reported seeing a negative impact on their profit margins. For many small, local tradespeople, these margins are often tight even in the good times. 15% of builders in Northern Ireland reported an increased workload in Q2 2022. However, this is down on the 31% seeing a positive workload in Q1 2022. The new figures also indicate a steep decline in the number of enquiries over Q2 with -31% of builders who responded saying they are receiving increased interest from customers for new work. This is down 69% on last quarter when 38% reported an increase in enquiries. This suggests the market, over the next few months, could be severely cooling off as homeowners look to save money. The key findings from the State of Trade Survey include: IMPACT ON NET PROFITS • 49% of small, local builders have seen a negative impact on profit margins owing to the current economic climate. NORTHERN IRISH MARKET ACTIVITY • 15% are reporting a rise in workload compared to last quarter. • -31% are reporting higher enquiries. Meaning more builders are reporting
“…uncertainty over rising costs within wider society means some clients are reluctant to commit to planned projects.”
MARKET CONDITIONS • 71% of small builders have delayed jobs because of a lack of materials. • 61% of FMB members have delayed jobs due to a lack of skilled tradespeople. • Housebuilding enquiries are down, tracking in negative territory for the first time since the pandemic. SKILLS • 42% of FMB members are finding it difficult to hire bricklayers, up 2% on last quarter. • 42% of builders are struggling to hire carpenters/joiners, down 3% on last quarter. PRICES • 98% of builders reported an increase in material costs in Q2 2022. • 95% of respondents expect material costs to increase in Q3 2022. • 81% of builders have put up their prices for work.
Gavin McGuire, Director of FMB Northern Ireland, said, “While levels of activity have remained quite high it’s a real concern that enquiries for potential new work have dropped considerably. If that pipeline is slowing down, it suggests that either it’s levelling out from what has been a busy period for the industry, or we are seeing a wider lack of confidence in affordability to complete projects.” McGuire continued, “Feedback from FMB members suggests that uncertainty over rising costs within wider society means some clients are reluctant to commit to planned projects. This is a real concern and presents another unforeseen challenge our members will try to overcome.” The FMB State of Trade Survey, which is released quarterly, is the only survey of its kind to track the experience of small to medium-sized construction firms in the UK. For further information contact: T: +44 (0)28 9446 0416 E: fmbni@fmb.org.uk www.findabuilder.co.uk
fewer or no change to enquiries compared to the last quarter.
Federation of Master Builders, Unit 10, Kilbegs Business Centre, Plasketts Close, Antrim, BT41 4LY T: +44 (0)28 9446 0416 - E: fmbni@fmb.org.uk www.fmb.org.uk - www.findabuilder.co.uk
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