Small builders bear brunt of construction downturn

WORKLOADS for Scotland’s small building firms operating in social housing have hit rock bottom, industry leaders warned today, in a hammer blow for the ailing construction sector.

Publishing its latest State of Trade survey, the Federation of Master Builders (FMB) said the SME building sector had now been in recession for four years.

The UK-wide report, which painted a similar picture north and south of the Border, found that social housing new-build workloads were at their lowest level since 1999, when the survey began.

Almost two-thirds of small and medium-sized companies reported lower workloads in the social sector in the first quarter, a marked increase from 47 per cent at the end of 2011.

The private new housing sector fared little better, with some 55 per cent of firms indicating that workloads had fallen in the first three months of 2012, compared with 45 per cent previously.

The construction industry has borne the brunt of the economic downturn, with scores of smaller operators forced out of business.

Official figures showed the sector suffered hefty falls in output in January and only muted growth the following month.

There are fears that the lack of growth will prove to be a major drag on the wider economy in the first quarter of the year, possibly leading to a contraction.

Grahame Barn, FMB Scotland director said: “The fact that workloads for small house builders are at an all-time low is very worrying given the chronic shortage of affordable housing.

“Although the government has introduced a number of promising initiatives to try and help the industry, support tends to be awarded to the large volume house builders meaning SMEs still miss out. The industry has lost around 69 per cent of its smaller firms since the late 1980s.”