The state of the construction industry for small builders is getting worse, warns the Federation of Master Builders (FMB) in response to data from its latest State of Trades survey of member's workloads for the third quarter of 2009.

The workload for the building sector over the last three months as a whole deteriorated with 50% of FMB firms reporting falling workloads with the industrial sector being hardest hit. The fall in workload is mirrored by a fall in confidence with 36% of firms expecting their workloads to decline over the next three months to the end of 2009. The only glimmer of hope is the fact that 15 % of FMB firms reported that they had actually increased their workload over the last three months.

Richard Diment, Director General of the FMB said: "The worst of the recession is far from over for thousands of small building firms. Despite speculation concerning a possible recovery in the general economy, it remains clear that construction has still to hit rock bottom and that any recovery in this sector is still quite some way away.

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"Government measures to kick start the economy are still not reaching small building companies which are pleading for more direct help.

"It is also interesting to note that calls to our Research and Information Department are down 17% overall, possibly due to lower workloads and less technical advice being required as a result.

"However, calls relating to debt recovery, legal advice and wages have increased by as much as 29%. The FMB has received more calls asking for help with recovering debt from clients who are unwilling or unable to pay. There has also been a marked increase in calls for advice on reducing staff hours rather than laying off staff or making them redundant which most employment calls were concerned with in quarter two."

Specialist builders are faring better than general builders in the recession. Around 17% of specialist builders reported that their workforce had actually increased over the last three months compared to 14% for general builders. Specialist builders are also more optimistic than general builders regarding employment over the next three months with 19% anticipating higher staffing levels and 58% predicting no change. This compares to 16% and 51% respectively for general builders.

Mr Diment added: "Getting the banks to lend again is now critical if the building industry is not to grind to a halt. What this recession shows is that those with specialist skills in the construction sector are best able to survive which is why it is so critical that the Government does all it can to help retain our skills base if the UK is to enjoy a sustained recovery and not repeat the mistake of the last recession in the early 1990s when more than 500,000 jobs were lost in construction and not replaced."

(CD/GK)