Responding to the fall in the Construction Purchasing Mangers’ Index (PMI) to 48.1 in September, the first drop below the 50.0 no-change threshold in 13 months, Mike Cherry, Federation of Small Businesses (FSB) National Chairman, said:

“Policy-makers have serious questions to answer about the decline in construction output highlighted by today’s PMI. Our latest research shows that changes to tax reliefs, levies and employer obligations have caused costs for small firms in the construction sector to rise at a faster rate than in any other industry. These policy-linked costs have increased by 34 per cent for construction firms compared to a cumulative CPI figure of 7.7 per cent for the five years to 2016.

“Being a labour-intensive industry, changes to minimum wage rates, pension auto-enrolment and increasing employer National Insurance Contributions have all had their part to play. We’ve heard those in power talk for years about the need to tackle the housing crisis. Yet they’ve simultaneously heaped additional costs on the very business owners who can help increase our supply of homes.

“Confidence among small construction firms has plummeted over the last year. Businesses across the sector will be looking to the Communities Secretary’s speech later this week, as well as the Autumn Budget, for urgently needed lifelines in an uncertain climate characterised by year on year increases in operating costs.”

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