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Increasing costs 'a concern for construction recovery'

The Federation of Master Builders (FMB) has highlighted the growing issue of rising material costs within the UK construction sector.Brian Berry, chief executive of the FMB, said this ongoing increase in expenditure for firms could have a considerable impact on the current fragile recovery that is being witnessed across many parts of the industry.He noted material costs have been high all year and any further increase could effectively "snuff out" the positive growth that is now beginning to take hold."Limited access to finance, the costs of regulation and a shortage of small sites for development are the key barriers for many smaller house builders," Mr Berry argued."Also, the Green Deal is not proving attractive to householders, with the result that small building companies aren't benefitting from any new work to upgrade existing homes."He called on the government to implement a number of major changes if it wishes to see a considerable upturn in the volume of the UK's housing stock undergoing sustainable renovation in the years ahead.This included recommendations for a reduction in the level of VAT charged on all domestic building work to ensure costs do not continue to mount for builders.Mr Berry's comments follow the publication of the FMB's latest State of Trade survey for the second quarter of 2013, which revealed 42 per cent of smaller builders across the country saw an increase in workloads in comparison to the same month last year.However, at the same time, the report claims material costs, wages and salaries are all expected to continue rising over the next six months, placing increasing pressure on businesses to raise their prices.As a result, the FMB warns that unless the government acts to forego future rises in expenses for these firms, this short-term gain in confidence could be replaced by long-term stagnation of the sector. 

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