According to the Federation of Master Builders (FMB), the economic recovery in the SME construction sector is under threat from rising building costs and material shortages.

The FMB has published its State of Trade Survey for the first three months of 2014.

Commenting on the results, chief executive Brian Berry, said: “Rising building costs and material shortages are causing serious concern in the building industry with 80% of SME firms expecting the situation to worsen over the next six months. Although our latest snapshot is the fourth successive quarter showing positive results for workloads, employment and enquiries, this could be undermined by a spike in prices and costs.”

Mr Berry continued: “Materials prices are generally around 10% higher across the board with small construction firms highlighting timber products such as sheet materials and timber fencing as being particularly expensive. The increase in the price of timber fencing is largely due to the severe storms that battered the UK during the winter.”

“Added to this are concerns over the ready supply of particular materials such as bricks, which could scupper the ability of SME house builders to plug the shortfall in housing supply – this at a time when we need to rapidly increase the number of new homes. Small house builders report that brick manufacturers are asking them to wait until the beginning of 2015 for new orders of bricks and our members perceive this prolonged delay to be a decision to prioritise brick orders from large house builders.

“If this problem continues, SME house builders may be forced to build with alternative materials such as render or risk stalling sites for the rest of this year,” he concluded.