A “truly devastating” jobs cull is expected among small to medium-sized builders in the first half of the year as work in the housing sector continues to shrink.
About half of the members of the Federation of Master Builders said they had made people redundant in the last three months of 2008, and about half planned to do so in the first half of 2009. According to the FMB, this could be about 90,000 job losses across small to medium-sized businesses.
Builders have seen their workloads disappear in the housing downturn, with little sign that government efforts to stimulate the housing market are boosting demand for new homes.
The FMB’s state of trade survey reported that 60 per cent of its member construction companies had found a drop in workloads, which have been falling for the fourth consecutive quarter.
Expectations for the future remained depressed, with 61 per cent predicting even lower workloads this quarter. Private housebuilders were worst hit, with more than two-thirds reporting a fall in activity, although the downturn has affected all sectors. More than 60 per cent of companies in the social housing, industrial and commercial sectors saw lower workloads for the fourth quarter of 2008.
Richard Diment, FMB director-general, called the findings “truly devastating”.
“When the recession last hit our industry 500,000 people were made redundant, we cannot allow that to happen again. The construction sector is weakening at a shocking rate ... the government must act now.”
He called for a cut in VAT to 5 per cent on property repair and maintenance, further reform to stamp duty and help for the SME sector.
The FMB said that one positive sign was slower rises in materials costs, as falling prices for oil and other commodities are being passed on by suppliers.
On a regional basis, companies in Northern Ireland and Wales were the most optimistic, followed by those in the East Midlands and the North West. Those in eastern Britain were most downbeat, followed by builders in Scotland.