FMB Asks UK Government to Boost the Construction Industry

The Federation of Master Builders has asked the UK government to look at ways of stimulating home construction within Britain as a way to kick-start the economy and help ease the housing crisis. Data from the Office of National Statistics shows output within this sector grew by just 0.3% during the final quarter of 2012, and this follows the fall of 2.5% between the second and third quarters of last year.

Although Brian Berry, chief executive of the FMB feels the UK government sees the economic benefits that can be brought about by boosting the construction sector, he also thinks it needs to do more to realize this potential. Berry is quoted as saying:

"Our members are ready to help Britain build its way back to growth. In the process helping meet the spiraling housing crisis and improving energy efficiency in homes and businesses. But we can't do this alone. The government must meet construction firms halfway, and find imaginative new ways of increasing activity in the sector, particularly for small, local builders who may not immediately benefit from major infrastructure investment."

Berry sees one way forward as being reducing VAT on the energy efficiency improvements to just 5%. He points out that doing so would enable homeowners to improve insulation, fit more efficient boilers and high-performance glazing. In addition Berry thinks UK ministers and local authorities should look at ways of bringing more housing online. This may mean releasing additional land for development, or refurbishing derelicts or empty stock. He added that:

"Easing planning red tape and pushing investment through the new Business Bank will help smaller construction companies begin to start providing the 250,000 new homes Britain needs every year just to keep pace with demand."

Last week the FMB released its latest State of Trade Survey, and the results make mixed reading. The survey found that a lot of firms think they may have to introduce price increases, as the cost of overheads are eating into their profit margins too much. Wages and material costs are all expected to increase during the next six months. Just under a third thought they may have to lay off workers this year but at least unemployment levels are predicted to fall at a slower rate during the next six months. Although workloads are still decreasing, and the rate of contraction has slowed for housing sectors, it hasn't done so in the non-residential sectors.