Builders laid off as costs rise and workload falls

Domestic construction is very price-sensitive. Picture: Getty
Domestic construction is very price-sensitive. Picture: Getty
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ALMOST a third of construction companies have laid off staff since the start of the year as falling workloads and rising costs have forced firms to scale back their operations, according to the Federation of Master Builders (FMB).

In its quarterly jobs report, published today, the trade body warned that builders north of the Border think the outlook “significantly worse” here than those in other parts of the UK.

The FMB’s Scottish members – which work mainly in the domestic repair, maintenance and improvement market (RM&I) – are more pessimistic than their colleagues in England, Northern Ireland and Wales when it comes to workload, expected workload and enquiries.

Grahame Barn, the FMB’s director for Scotland, said: “All work, but especially domestic RM&I, is very price-sensitive.

“To secure work our members are working on minimal margin – if any at all. This does not give them any confidence over the short to medium term.

“This, in turn, impacts upon employment and apprenticeship places. Add to that increasing material and labour costs and the picture for the next quarter remains bleak.”

The FMB renewed its calls for the UK government to cut the VAT rate on home repairs from its current 20 per cent to stimulate demand in the sector.

The trade body also called for ministers to promote more aggressively the Green Deal, a loan scheme introduced by the UK government. Under the scheme, homeowners can borrow cash to install double glazing, loft insulation or other power-saving measures and then pay the cost back through their energy bills.

Barn said: “There is negligible awareness of the Green Deal by Scottish homeowners.

“A substantial marketing campaign of the benefits of the Green Deal will give the Scottish construction industry the necessary fillip that it desperately needs, while helping householders and businesses make their buildings more energy-efficient and affordable.”

However, one construction company that is bucking the trend in the building sector is Doncaster-based Keepmoat, which has won contracts from Scottish six local councils and housing associations worth a total of £18.5 million from its offices at Cambuslang and ­Linwood.

Scotland director Eamonn McGarvey said: “Keepmoat’s success in winning these contracts not only helps secure jobs for our existing staff but also directly supports our suppliers and subcontractors, who are engaged on their delivery.”

• BANK of Scotland’s monthly labour market barometer rose to 53.0 in March from a seven-month low of 51.2 in February, thanks to rising demand for both permanent and temporary staff, the lender said today.

Donald MacRae, chief economist at Bank of Scotland, said: “The number of people appointed to both permanent and temporary jobs rose, while the number of vacancies increased.

“These results reinforce the view that the Scottish economy is continuing its slow recovery from recession.”