Federation of Master Builders warns of ‘collapse’ in confidence

THE organisation representing the UK’s small and medium-sized construction firms today warned of a “collapse” in confidence in the sector.

The Federation of Master Builders (FMB), the UK’s largest trade association in the construction sector, says that 5% of its members expect their workloads to increase in 2012, with market conditions at their worst since the first quarter of 2009.

Participants in the latest survey are particularly gloom in respect of the repair, maintenance and improvement (RM&I) market.

Sentiment in the East of England is less pessimistic than across the UK as a whole, with an index balance of minus 14 in the fourth quarter of 2011 against minus 33 nationally, but the regional figure still represents a markedl decline from plus six in the last FMB survey three months ago.

Nationally, the FMB’s State of Trade Survey has now showna decline for 16 consecutive quarters although until the final quarter of 2011 the eastern region had recorded only one negative figure in the previous 18 months.

Brian Berry, director of external affairs at the FMB, said: “The disastrous results for the RM&I market are very alarming given that the Government will be launching its Green Deal home improvement initiative in October.

“Market conditions in the building industry haven’t been this bad since the first quarter of 2009. Clearly, robust incentives for householders are needed if the Green Deal initiative is to succeed in a depressed market.”

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He added: “50% of FMB members responding anticipate workloads falling still further in the coming quarter compared to 33% in Quarter Three of 2011.

“This indicates that the increasingly uncertain outlook for the economy and more downbeat prospects for employment may lead to a retrenchment in consumer spending, particularly on discretionary items such as non-essential RM&I work.

“Although the Green Deal has no upfront financial costs the Government needs to accept that it is still perceived by householders as a debt and there is no appetite for more borrowing amongst householders already worried about meeting existing commitments.

“If the Government’s Green Deal initiatives is to succeed in its ambition to retrofit 14 million properties by 2020 then it will need to provide householders with additional financial incentives such as a reduced rate of VAT or lower Stamp Duty.”