FMB survey reveals 52% of SMEs plan to make redundancies in first half of year

More than half of small and medium-sized builders are planning to make redundancies in the next six months, meaning up to 90,000 further job cuts for the industry in 2009.

According to a survey from the Federation of Master Builders 52% of members plan to make redundancies in the first half of this year, with a similar number having already made cuts.

The organisation said that if fulfilled, the job cuts would lead to 90,000 construction workers losing their jobs from SMEs in six months. In addition 60% of firms reported a fall in workloads in the last three months, a figure which rises to 71% for builders in the housing sector.

Two thirds of respondents said they expected workloads to fall even further.

Richard Diment, director general of the Federation of Master Builders said the figures were “devastating” and called for an immediate cut in VAT on home maintenance and renovation work. He said: “The construction sector is weakening at a shocking rate, which is why the government must act now to prevent any further suffering. A targeted cut in VAT to 5% on home maintenance and repairs would help kick start this move.”

He added that the last construction recession saw 500,000 workers lose their jobs.

A separate lobby organisation, the Forum for Private Business, said the government needed a long-term plan to address difficulties for small businesses.

Phil Orford, the FPB's chief executive, said: “Small businesses need more than the Prime Minister's £2,500 golden hellos for taking on people who have been unemployed for more than six months. They require a long-term plan and a significant reduction in employment regulations.”