Workloads Increase but Skills Shortages Continue in SME State of Trade Survey

THE UK construction industry is picking up pace in H1 2025 with an increase in workloads and enquiries for new work. However, homeowners may still face longer waits, rising prices, and even cancelled projects.

The new SME State of Trade Survey, carried out by the Federation of Master Builders (FMB), and the Chartered Institute of Building (CIOB), shows more projects are underway, and more workers are being hired. Yet, despite this recovery, many firms are still struggling to find skilled tradespeople and manage rising costs, and that could mean disruption for homeowners planning renovations or new builds.

‘Severe’ Skills Shortages

The survey shows projects are being held back by a ‘severe’ shortage of skilled tradespeople; 33% of firms said carpenters are the hardest to recruit, followed by roofers (32%) and plumbers/HVAC (28%).

Of those surveyed, 64% struggle to find workers with building safety regime knowledge, and 59% can’t find staff with sustainable building and new tech skills. Additionally, 61% have been directly affected by shortages, causing job delays (49%) and cancellations (23%).

Even where skills are available, planning processes were shown to be slowing things down as 38% of firms experiencing delays said planning is the primary cause. This is a particular problem for SME builders, who are essential to delivering the UK’s housebuilding targets but are too often held back by red tape, says the CIOB.

Making matters worse for homeowners, the survey shows costs are still climbing: 75% of builders said they have seen material prices rise, 67% report higher wages, and 61% have increased the prices they charge.

Paul Gandy, CIOB President, said: “The issue of skills shortages is one the industry knows all too well, and it continues to create real challenges – for those doing the building, and for the public who face delays and rising costs as a result. With more people now choosing to improve their homes rather than move, it is vital for families and the wider economy that they can access reliable, competent builders delivering high-quality, affordable work.

“SMEs are the backbone of our industry, yet too often they are held back by issues such as late payments, and barriers to taking on apprentices. If we want a strong, sustainable pipeline of skilled workers, we need to make it easier and more affordable for SMEs to train the next generation.

“More apprenticeship places and homebuilding skills hubs are welcome steps forward, but we would like to see more done to inspire young people to pursue a career in construction – whether through better in-school careers advice or a dedicated built environment GCSE. The insights from this State of Trade survey are vital in helping us make that case to Government.”

SME State of Trade Survey

Further top lines from the report show:

Market Conditions

Net workload increased by +25%, reversing the decline of –11% in Q4,24. This marks the first simultaneous growth in workload, enquiries, and employment since Q2,23.

Net enquiries rose to +34%, up from –23% in Q4,24.

Net employment change was +26%, the strongest quarterly improvement since Q1,10.

Regional Performance

In all four UK nations, both workloads and enquiries increased.

• Northern Ireland: Workloads +36%, Enquiries +64%
• Scotland: Workloads +30%, Enquiries +56%
• Wales: Workloads +24%, Enquiries +50%
• England: Workloads +21%, Enquiries +18%

Skills

39% of firms increased workforce size, up from 17% in Q4,24.

Only 13% reported a decrease in staff numbers.

Impact of Skills Shortages

61% of firms said they were affected by lack of skilled tradespeople.

49% reported experiencing job delays.

23% had job cancellations.

Business Outlook

51% of firms said they have a positive outlook for H2,25.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), commented: “It’s encouraging to see the construction sector getting back on its feet, with builders busier and more confident than they’ve been in months.

“House building and home improvement are leading the way, and many firms are expanding their teams to meet demand. But the reality is that many homeowners could still face delays or higher costs. Builders are finding it harder than ever to recruit skilled workers and rising prices for materials and wages are putting pressure on businesses. These challenges are slowing down delivery and making it harder for firms to take on new work.”

“If skills shortages and planning delays aren’t addressed there is a risk that the economic recovery will be slowed down and housing targets won’t be delivered. The industry is ready to build, but it needs support to do so. Without it, homeowners may be left waiting, and the UK could fall further behind on the homes that are urgently needed. Action is needed to ensure that the recovery is not just short-lived but sustainable, and that builders have the tools they need to keep Britain building.”

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