The Federation of Master Builders says confidence in the building industry has collapsed with fewer SMEs expecting increased workloads in 2012.
The FMB state of trade survey has now shown that workloads in the SME construction sector have declined in each of the 16 quarters to the end of December 2011.
The survey shows an expectation that confidence in the repair, maintenance and improvement (RM&I) market is set to plunge.
Details of the survey were released after climate change minister Greg Barker launched a new Green Deal Skills Alliance (see below).
State of trade survey 2011 Q4:
Workloads continued to decline across the board, with no improvements in net balances seen in Q4 2011. The public new build sector saw the strongest deterioration with 53 per cent of firms indicating that workloads had fallen, compared with 39 per cent in Q3.
Firms are anticipating that workloads will continue to decline across the board in Q1 2012. The strongest deterioration in sentiment was for private RM&I, where just 5 per cent of respondents anticipate rising workloads.
Weakening conditions in the wider economy are likely to constrain consumer spending on items such as non-essential home improvement works.
Around half of respondents indicated that enquiries had declined in the final three months of the year, compared with 44 per cent in Q3. The private RM&I sector saw the strongest deterioration, as 53 per cent of respondents reported a decline, up from 48 per cent three months ago.
Overall employment continued to fall, although 54 per cent of respondents reported no change in staffing levels during the quarter. Moreover, around 31 per cent of specialists indicated higher levels of employment in the final three months of 2011, compared with 23 per cent reporting a fall.
FMB director of external affairs Brian Berry said the results in RM&I were particularly ominous with the launch of the Green Deal set for October.
He said: “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.”
Construction News revealed last week that the FMB has put its London headquarters up for sale as it attempts to raise funds for its new five-year business plan through which the group aims to develop a competent-persons scheme for people seeking Green Deal work.
Mr Berry added: “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 initiative 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.”
Climate Change Minister Greg Barker has launched the Green Deal Skills Alliance, made up of three sector skills councils - Asset Skills, CITB-ConstructionSkills and SummitSkills
The alliance is working to create new training and accreditation for the energy assessment, advice and installation workforce – the people who will carry out the improvements.
Mr Barker said: “The success of the Green Deal will, in part, come down to having people who have the right skills and knowledge to instill trust. The Green Deal Skills Alliance will help industry face the challenges ahead so people get the right training and qualifications they will need in order to gain work under the Green Deal.”
CITB-ConstructionSkills chief executive Mark Farrar said the alliance wants to help SMEs to understand new legislative requirements and to ensure that government and larger contractors support them.
SummitSkills chief executive Keith Marshall said that employers have expressed concerns about “where to start to prepare their people” to support and take advantage of the scheme.
Asset Skills chief executive designate Sarah Bentley added: “The new skills programmes we are introducing as part of the GDSA are important for the UK to meet its targets on cutting carbon. The partnership is running a series of Green Deal Connections events to raise awareness that only those with the right qualifications will be able to secure work from the Green Deal.”
To register for a Green Deal Connections event, click here.