Almost two thirds (61%) of construction SMEs are being affected by a lack of skilled tradespeople, according to a joint report from the Federation of Master Builders (FMB) and the Chartered Institute of Building (CIOB).
The findings from the latest SME State of Trade Survey show that despite strong growth in workloads during the first half of 2025, acute skills shortages and rising costs are disrupting delivery and impacting profits.
According to respondents, the most difficult trades to hire are carpenters (33%), roofers (32%), plumbers/HVAC (28%), general labourers (29%), and bricklayers (28%).
The survey found that, due to these skills shortages, 49% of employers have experienced job delays, while 23% have faced job cancellations.
Continued cost increases and squeezed margins also appear to be impacting potential employment opportunities. Around one third (34%) of employers said they are restricting recruitment, and just over one in five (22%) are making staff redundant.
Despite the challenging outlook across the labour market, 39% of firms have increased the size of their workforce – up from 17% in Q4 2024. In addition, just 13% of employers reported a decrease in staff numbers.
Overall, net employment change was +26%, the strongest quarterly improvement since Q1 2010.
Commenting on the findings, Brian Berry, FMB’s chief executive, said: “After a tough end to 2024, it’s welcome to see the construction sector turning a corner in the first half of 2025.
“However, recruitment remains a major challenge, with carpenters, roofers, and plumbers among the hardest roles to fill. Skills shortages are having a real impact on delivery.”
Paul Gandy, CIOB president, added that the construction industry must “make it easier for smaller firms to thrive”.
“That means tackling issues such as late payments, and ensuring SMEs can affordably hire apprentices to grow the skilled workforce our sector desperately needs,” he said.
“With the right support, SMEs can and will continue to play their crucial role in building a stronger, more resilient built environment.”
