The recovery in the construction industry in the UK is in danger due to increasing material and labour costs, according to a new survey from the Federation of Master Builders (FMB).
The latest quarterly survey of member firms found that the net balance for workloads, expected workloads and enquiries in the third quarter of 2013 was positive across nearly all parts of the UK as it was in the second quarter.
FMB said that the private new build and residential repair and maintenance sectors saw a marked improvement, and overall 42% of small builders saw their workloads increase.
Respondents in the survey are also predicting increasing activity levels over the next three months when compared to the previous quarter.
According to the survey, around a third of firms expect workloads to increase, which is up from 29% in Q2 2013. However, the share of businesses anticipating falling workloads also grew.
With material costs, wages and salaries rising, many building firms may have to put up their prices.
FMB chief executive said Brian Berry said Britain’s builders have endured some of the most testing economic conditions in living memory and the lean years have taken their toll.
"Construction SMEs have battled to maintain staffing and capacity while trying to keep prices competitive," Berry said.
"Material costs have remained high throughout 2013, and further increases could snuff out this recovery in its infancy, especially if companies that have cut their profit margins to the bone to beat the recession are now forced to pass on those costs to their customers."
Berry noted that the government’s ‘Help to Buy’ scheme is having a positive impact on the housing market, helping create demand for more privately built houses, which is having a knock-on effect for the home repair and refurbishment sector.
"However, there is a danger smaller house builders won’t benefit from this upturn because of barriers they face to market entry."