A construction skills crisis coupled with overcomplicated tender processes and a lack of local government support have been blamed for a rising number of Welsh construction firms facing administration.
A report from CIOB has revealed that small and medium-sized enterprises (SMEs) struggle to compete with larger businesses when applying for work, despite making up 99% of the Welsh construction industry.
The SME Construction Landscape in Wales: Risk factor analysis says many SMEs feel forced to take the work even though they know it will involve taking a financial hit, just to ensure they have a pipeline of work to keep their business afloat.
David Kirby, CIOB’s policy lead for Wales and author of the report, said: “With economic pressures like high inflation driving up material costs, an extremely competitive labour market, and persistent skills gaps in the sector, there is little surprise so many construction SMEs in Wales have experienced significant failures in recent years.
“The effects of these failures are not only felt by the owner and employees of the business, but also their clients and the wider supply chain.”
CIOB has long called on the government to work closely with the construction sector to develop long-term policy thinking, giving SMEs more confidence to upskill their staff and take on more projects.
The professional body also revealed SMEs struggle to keep up with ever-changing regulations across the sector.
Other recommendations for members of the Senedd include more devolution of powers to local governments across the country, affording them more control over their funding and the freedom to plug holes in resource gaps.
The report was handed to members of the Senedd in October.
Read the report in full at www.ciob.me/welshsme.
