SMALL and medium-sized (SME) building firms in Wales enjoyed strong growth in the final quarter of 2017, according to the Federation of Master Builders (FMB) Cymru.
Key results from the FMB’s latest State of Trade Survey, which is the only quarterly assessment of the UK-wide SME construction sector, include:
- The pace of growth among Welsh construction SMEs quickened in Q4 2017 compared with the previous quarter;
- Fewer construction SMEs predict rising workloads in the coming three months, down from 41% in the previous quarter to 38% in Q4 2017;
- 87% of builders believe that material prices will rise in the next six months, up from 82% in the previous quarter;
- More than two-thirds (68%) of construction SMEs are struggling to hire bricklayers and 63% are struggling to hire carpenters and joiners;
- Nearly two thirds (61%) of construction SMEs expect salaries and wages to increase in the next six months.
Ifan Glyn, Director of FMB Cymru, said: “Growth among Welsh construction SMEs has now risen for five consecutive quarters. Wales was the only home nation in the UK to experience a faster rate of growth in the final quarter of 2017 when compared to the three months to September. These results are particularly pleasing, and perhaps even surprising, given that rising costs and ever-worsening skills shortages continue to burden Welsh firms. However, there is certainly no room for complacency.
“The skills crisis is getting steadily worse and this is having a knock-on effect on rising salaries and costs. More than two thirds of construction SMEs are struggling to hire bricklayers and this has increased by nearly 10% compared with the three months leading up to September of 2017. The salaries for these scarce skilled tradespeople have rocketed. What’s more, almost 90% of firms believe that material prices will rise in the next six months and this, coupled with a rise in wages, will see firms’ margins squeezed.”
Glyn concluded: “The Welsh Government has set an ambitious target to build 20,000 affordable homes and while the results of the FMB’s research are mainly positive for Wales, it does expose these continuing threats which could undermine these plans. With Brexit on the horizon, we should be aware that the skills shortages could be exacerbated in the coming months.
“Although EU migrants only represent a small proportion of construction workers in Wales, we know that London is heavily reliant on these workers. Indeed, half of London’s construction workers were born outside of the UK.
“If London and the wider South East continue to suffer skills shortages, tradespeople from Wales may choose to work across the border after being tempted by the prospect of higher wages. It is therefore equally important for construction firms across the UK that the Westminster Government treads carefully and delivers a responsive and flexible immigration system to replace the free movement of people. Anything less will be a cause for alarm for the Welsh construction sector.”
The report was compiled by Experian and in Q4 2017, 338 construction SMEs responded to the survey. The results reflect balances – ie the number of firms reporting a rise in workload against the number of firms showing no change or a fall. This gives a qualitative, as opposed to quantitative, overview.
Experian offers this explanation: “Balances reflect the percentage of responses reporting higher workloads against those reporting lower workloads. In some cases, though the chart suggests activity has fallen strongly, a large proportion of respondents indicated there had been no change in workloads compared with the previous quarter.”
Business rates relief scheme extended
WELSH GOVERNMENT Finance Minister, Rebecca Evans AS, has extended a business rates relief scheme.
In a written statement to the Senedd last week, the Minister announced a further twelve months’ support for all retailers in Wales with a rateable value of up to £50,000.
As a result, the Welsh Government will now provide over £1/4bn in rates reliefs for businesses.
The additional money will be fully funded by the Welsh Government and will provide support of up to £2,500 towards the rates bills for retail properties with a rateable value of up to £50,000.
It will reduce rates bills to zero for retail properties with a rateable value up to £9,100 and reduce bills by £2,500 for properties with a higher rateable value.
As well as supporting retailers on the high street, the scheme will continue to support retailers in other locations. Ratepayers benefitting from the relief include those with occupied retail premises such as shops, restaurants, cafes, pubs and wine bars.
A further £2.4m will be allocated to local authorities to provide additional discretionary rates relief for local businesses and other ratepayers to respond to specific local issues. This funding will be provided through the local government settlement, taking the total being provided to local authorities for discretionary relief to £4.8m for 2020-21.
The scheme will continue to be administered by local authorities on an application basis and operates in addition to other support provided by the Welsh Government. This means that while local authorities will collect the business rates, at a cost to the local Council Taxpayer, they have little or no say in how the money collected from business rates feeds back into or supports the communities from which it is collected.
While the Welsh Government continues to tinker at the edges of business rates, as The Herald reported before Christmas there is a widespread call for the whole system to be overhauled.
In November, the Treasury Select Committee published its report on business rates.
It acknowledged the burden the current regime poses for businesses of all sectors and sizes and that it is no longer fit for purpose. It also agreed that business rates deter investment.
One solution, a commercial landowner levy based on the land value of commercial sites rather than their capital value, would shift the burden from tenants to landlords. Such a radical reform seems highly unlikely as long as the Treasury has its hooks into the billions raised by business rates. In practice, unless regulation was strict, it would enhance the desirability of obtaining tax benefits by leaving commercial sites vacant.
At the last election, every political party agreed that business rates needed reform.
Labour’s Mid and West Regional AMs Eluned Morgan and Joyce Watson welcomed the announcement.
They said as well as supporting retailers on the high street, the scheme will continue to support retailers in other locations including restaurants, cafes and public houses.
Eluned Morgan AM said: “Across Wales, 15,000 small and medium businesses will be supported in the new financial year”
Joyce Watson AM said: “I welcome this latest announcement to support local businesses. It will reduce rates bills to zero for retail properties with a rateable value up to £9,100 and support of up to £2,500 towards the rates bill for retail properties with a rateable value up to £50,000.”
Dave Matthews, who runs the Oasis bookshop in Whitland welcomed the continued support being offered saying: “We are very happy about this continuation. Oasis is much more than a shop in Whitland, it’s a drop-in centre for the community too. What makes what we do sustainable is the fact that our business is supported by this continued rate relief.”
Really Wild Festival returns
A FESTIVAL that celebrates all things inspired by nature and rural life is returning to St Davids on Saturday, May 30.
The multi-award-winning Really Wild Food and Countryside Festival will be held at Oriel y Parc Gallery and Visitor Centre from 10am-5pm on May 30, returning to the site where the event originated in 2004.
Founded in 2004, the Festival is a friendly, informal and fun event that celebrates rural life, food and country crafts. It also provides producers and growers with the opportunity to showcase their products to businesses and visitors.
Oriel y Parc Manager, Claire Bates said: “Spaces will be allocated to stall-holders on a first-come, first-served basis. To maintain the original ethos of the festival, the products on display or for sale will need to include ingredients from the wild or have a very close connection with the countryside.
“We’re committed to hosting an event that minimises our impact on the environment and are encouraging stall-holders to reduce or reuse non-biodegradable plastics wherever possible.
“Application forms are now available for producers, businesses and charities who wish to attend the event. Please note the deadline for applications is April 1.”
The festival will be held in and around the Oriel y Parc grounds and will be free to enter, with a small fee for some activities.
For more information including booking forms for concessions and exhibitors visit www.orielyparc.co.uk/reallywild.
To discuss your application email firstname.lastname@example.org or call 01437 720392.
Work begins on new station at Bow Street
TRANSPORT for Wales has begun work on the new £8-million railway station at Bow Street in Ceredigion.
Opening to passengers in 2020, the station, which is funded by the Welsh Government and the Department for Transport, will include park and ride facilities, cycle storage and a multi-modal transport interchange. The scheme is being delivered by TfW, Network Rail and Ceredigion County Council.
Part funded by the Department for Transport via the New Stations Fund , the new station will provide a link to the national rail network for the community of Bow Street for the first time since the former station was closed in 1965. This will transform transport for local residents, providing links for employment and educational opportunities. Through providing alterative travel, it will also help ease road congestion on local roads supporting the sustainability agenda.
Located close to the UK Innovation and Research Campus that is being developed by Aberystwyth University, the station will provide access between the site and the University’s main campus in Aberystwyth itself.
The station will be served by trains on the Cambrian Line between Aberystwyth and Shrewsbury, and will be the first of several improvements to services on the line as part of TfWs transformation of the Wales and Borders rail service.
Bow Street will benefit from the introduction of brand new trains and an hourly weekday service from 2022, and other stations along the line will benefit from investment as part of TfWs £194 million Station Improvement Vision.
Ken Skates, Minister for Economy and Transport, said:
“Our vision for railways includes the opening of new stations and the improvement of connectivity across all regions in Wales. This is the beginning of delivering that ambition. Bow Street Station will improve links to employment, business, education and leisure facilities in Mid Wales.
“We have been clear about the need for greater investment by the UK Government so we welcome this funding from the Department for Transport, which sits alongside our own funding. We look forward to further joint working and investment from the UK Government, which has responsibility for rail infrastructure under the current devolution settlement, to improve rail infrastructure in all parts of Wales.”
James Price, Transport for Wales CEO, said:
“I’m delighted that work has started on the new station at Bow Street as it’s an important part of our plans to transform transport throughout the whole of Wales.
“This is the first station we’re building since we took over the Wales and Borders rail service, and we’ve committed to at least five further schemes, demonstrating our commitment to investing in connecting communities throughout Wales to the rail network.”
Claire Williams, Community Rail Officer said:
“The Bow Street Interchange project will make the railway more accessible for passengers from all over the county as well as reducing the amount of congestion on the roads within the area, therefore reducing the carbon emissions which of course is fundamentally better for the environment. The Cambrian Railway Partnership is proud to have been involved in this project from its inception and look forward to its opening later this year.”
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