In 2024, nearly half of master builders anticipate missing profit targets, despite increased prices.
- 44% of builders expect their profits to fall short this year, reveals the Federation of Master Builders’ survey.
- Material costs have risen, prompting 65% of builders to hike prices to sustain their margins.
- While workloads increased by 6%, the industry faces a concerning decline in enquiries.
- Although recruitment eased for some roles, finding general labourers remains challenging.
In the turbulent economic climate of 2024, almost half of master builders in the UK are poised to miss their expected profit margins. This unsettling finding emerges from the Federation of Master Builders’ (FMB) first-quarter state of trade survey. The survey unveils a challenging environment, despite builders’ attempts to cushion their margins by raising prices.
Material costs have surged over the past quarter, forcing 65% of the surveyed builders to increase their prices. This escalation comes amid an uptick in workloads, which rose by 6% compared to the previous quarter. However, the positive momentum in workloads is overshadowed by a 44% decline in enquiries, painting a complex picture for the construction sector.
Recruitment challenges have shown signs of easing overall, yet the quest for skilled labour continues. Notably, the difficulty in hiring general labourers has become more pronounced, with 28% of respondents struggling to secure these workers, up from 24% in the previous quarter. The situation is slightly better for carpenters and bricklayers, although 33% and 28% of members, respectively, still report hiring difficulties.
Brian Berry, the chief executive of FMB, commented on these issues, noting the persistent adversities small builders face across the UK. While the early months of 2024 show some stabilisation, the sector remains mired in a situation reminiscent of the economic strains from 2010 to 2013, marked by austerity and limited spending power.
Despite some promising signs, such as the improved availability of bricklayers and carpenters and the increased workloads, the construction industry’s outlook remains concerning. With 44% of builders predicting profit shortfalls and more than two-thirds grappling with rising material costs, the sector faces formidable challenges that require urgent attention.
The construction sector must address rising material costs and falling enquiries to stabilise and thrive.
