The Federation of Master Builders (FMB) says there has been a sharp decline in workloads, enquiries, and employment, amongst small building companies across Northern Ireland with 40% of FMB builders reporting a decrease in the number of work enquiries according to the latest State of Trade Survey.

The good news is that the repair, maintenance and improvement (RMI) sector continues to remain buoyant with most FMB members reporting increased workloads.

For members in Northern Ireland there were particular factors affecting the market:

Northern Ireland market conditions

• There has been an indicative significant decrease in the number of builders in Northern Ireland reporting an increase in workload, compared to last quarter.
• The future of work also looks less healthy with a decline in enquiries compared to Q2, but still more members reporting an increase, than a decrease.

Gavin McGuire Director of FMB in NI said: “The RMI sector remains fairly strong this quarter however enquiries and workload pipeline seems to have been quieter in this last quarter. The tightening of the economic climate with increased interest rates does seem to be affecting confidence to proceed with work.

“House building continues to struggle with more members reporting less workloads than there are reporting more. The planning offices of district councils are reporting a significant drop in the last quarter in applications which is a concern in terms of pipeline of new homes.

“The survey has also highlighted continued pressure on bottom lines, with members putting up prices to accommodate for economic adversity and with inflation holding this is a trend that may continue. Without a functioning Executive and Ministers to lead departments, decisions around investment and future planning appear to also have a detrimental affect on public confidence.

The latest survey for Q3 2023 found across the UK:

 Market conditions

• There has been a decrease in total workload, enquires and employment over Q3 of 2023, seemingly driven by a poor performing housebuilding and industrial and commercial sectors.
• 40% of FMB members reported a decrease in enquiries.
• RMI reported workloads remain positive, but have dropped off since Q2 2023.

Skills

• Overall, difficulty in recruitment has slightly increased.
• 39% of members are struggling to hire carpenters with 35% struggling to hire bricklayers.
• There has been a sharp upturn in difficulty hiring general labourers, with 34% reporting problems (up from 25% in Q2)
• Half of FMB members report that jobs are delayed because they are struggling to hire skilled workers.

Impact of changes in prices and costs

• 71% of members report that material costs increased in Q3 2023 with 55% expecting this to continue into the next quarter, which is an improvement on previous quarters.
• The impact of increased outgoings has led to 71% of members increasing the prices they charge, with half reporting that the business in on track to make a loss or fall below expected margins.
• Over a quarter report that they are restricting hiring new staff as a consequence of increased outgoings.

The FMB State of Trade Survey, which is released quarterly, is the longest running survey of its kind to track the experience of small to medium-sized (SME) construction firms in the UK.