The construction sector has shown its resilience these past three years. With an uptake in home renovations and ‘build back better’ projects, the industry has managed to stay afloat. Labour shortages and a rise in material costs have put pressure on the market, but it has managed to weather through.
However, the tide may be turning.
In July 2022, the number of construction firms that went into administration rose. A total of 347 small businesses closed their doors, up from 313 the previous month. And during the second quarter of 2022 construction orders dropped 10%.
Energy costs are partly to blame, however the steel industry, in particular, is facing an ongoing battle to lower prices in-line with costs in Europe.
Steel costs in the UK are 60% more expensive than in Germany, and 80% more than France.
The British Association of Reinforcement has urged the government to do more to help reduce production costs. The mini-budget on September 23rd 2022 set out to help small businesses by reducing rates. However, since the announcement, the pound has dropped meaning imports into the UK have risen even further.
What impact the drop in the pound’s value will have on energy prices is yet to be seen. The UK is still relying too much on energy imports, which may see the Energy Bill Relief Scheme barely touch the surface in a weakening economy.
Tradesman Talk
If you own a small business, have you put a strategy in place to help you through the coming months?
Do you think the government is doing enough to help, or are they making the situation worse?
Leave your comments below, and click the social links to share this article with your network.
Until next time, make sure it’s Tradesman Saver.
1 Comment
Hello Tradesmen.
It does make me wonder whether our government in power at the moment and our MPs in general really live in the real world I have a small business I’ve managed and not all have managed to survive .but being at an age now where I do wonder whether I can continue on the basis that we have at the moment I think a lot of it we need to admit that Brexit wasn’t a good idea for many companies in the building trade or a beer companys in your local area it’s been handled very badly and I guess it will continue for a long time to come. i’m lucky that I can work abroad and I can see the real difference in costs and values of property we might be a small island we are paying through the nose for everything now and probably will do for a considerable future sadly.