The Federation of Master Builders (FMB) warns that the UK construction industry could be severely impacted by the weakening of the Pound following the Brexit vote, with the rising cost of construction materials affecting profit margins for an industry which is heavily reliant on imported products and materials.
The FMB’s State of Trade Survey Results for Q2 2016 indicates that two thirds of SME construction bosses predict further material price inflation, creating more complications for already challenged SME construction firms.
Commenting on the report, Brian Berry, Chief Executive of the FMB, said: "With the dramatic fall in currency value … we’re concerned that the trend towards price inflation will gather pace. We’ve already heard accounts of timber and brick costs rising, and a number of sources have said that even steel prices have risen by 8% since the decision was made to leave the EU.
"The Government must do everything in its power to reverse this situation and get Britain building again,” he continued, in response to the recent Office for National Statistics stats which shows that the construction sector is now in recession.
With many SME construction firms already operating on thin margins and being forced to tender at prices which bear little return on profit in order to remain competitive, it is important that they consult a professional business adviser who know the challenges faced by their industry. At Beavis Morgan, we work with a number of construction businesses, helping them with strategic planning, business turnaround and improving business performance for the future. Our partner business, BM Advisory, is also on hand to find the right solutions for businesses and individuals in distress.
For further information about how we can help you and your business, contact Steve Govey or your usual Beavis Morgan Partner.