FMB and CIOB publish State of Trade survey findings 2025

1 The SME State of Trade Survey, January to June 2025
2 Background to the survey
3 Key Indicators
4 Context
5 Market Conditions
6 Skills
7 Impact of Skills Shortages
8 Business Outlook
9 Comments
10 Related articles on Designing Buildings

[edit] The SME State of Trade Survey, January to June 2025

A joint Federation of Master Builders (FMB) and Chartered Institute of Building (CIOB) publication monitoring key indicators and predicted future short-term developments for micro and SME building firms, tthe SME State of Trade survey results for the first half of 2025 have been published.

The UK construction industry is picking up pace in 2025 with an increase in workloads and enquiries for new work but the downside is that homeowners may still face longer waits, rising prices, and even cancelled projects, reports the new SME State of Trade Survey, carried out by the Federation of Master Builders (FMB), and the Chartered Institute of Building (CIOB)

More projects are underway, and more workers are being hired. However, despite this recovery, many firms are still struggling to find skilled tradespeople and manage rising costs, and that could mean disruption for homeowners planning renovations or new builds.

[edit] Background to the survey

For more than 30 years, the State of Trade Survey has monitored key indicators and predicted future short-term developments for micro and SME building firms.

It has now been refreshed for 2025 and will be released every six months to measure the state of the industry. The survey is commissioned by the Federation of Master Builders (FMB) and the Chartered Institute of Building (CIOB).

It is the only survey of its kind to focus exclusively on small and medium-sized (SME) firms throughout the construction sector. The report looks at activity from January to June 2025, referred to in this report as H1. It casts ahead to July to December 2025.

[edit] Key Indicators

Key Indicators from the report include:

[edit] Construction Industry Outlook

In the first half of 2025, all of the key performance indicators (workload, employment, and enquiries) showed marked improvement across the construction industry. For the first time since Q2 2023, all three indicators show growth, signalling an upturn within the industry.

[edit] Workload

Respondents reported a net workload increase of +25% in both first half of 2025 (H1). This represents a substantial change in trajectory from -11% in Q4 2024. The current level is comparable to H1 2022, which marked the initial recovery period after the COVID-19 lockdowns.

[edit] Employment

Employment has also rebounded, with a net change of +26%, another significant change in direction from -8% in Q4 2024. Apart from a brief uptick in Q2 2023, employment has been in decline since Q4 2022 but has now seen the strongest quarterly improvement in employment since Q1 2010.

[edit] Enquiries

The industry saw a net increase of +34% in new enquiries, another substantial change from -23% in Q4 2024. This positive trend is comparable to the growth seen in late 2021 and early 2022 as the sector emerged from COVID-19 disruptions.

[edit] Context

A severe shortage of skilled tradespeople is holding projects back:

33% of firms say carpenters are the hardest to recruit followed by 32% roofers; and 28% plumbers/HVAC.
64% struggle to find workers with building safety regime knowledge, and 59% can’t find staff with sustainable building and new tech skills.
61% have been directly affected by shortages, causing job delays (49%) and cancellations (23%).

Even where skills are available, planning processes are slowing things down - 38% of firms experiencing delays say planning is the primary cause. This is a particular problem for SME builders, who are essential to delivering the UK’s housebuilding targets but are too often held back by red tape.

Making matters worse for homeowners, costs are still climbing:

75% of builders have seen material prices rise.
67% report higher wages.
61% have increased the prices they charge.

Further top lines from the report:

[edit] Market Conditions

Workloads: Net workload increased by +25%, reversing the decline of –11% in Q4 2024. This marks the first simultaneous growth in workload, enquiries, and employment since Q2 2023.
Enquiries: Net enquiries rose to +34%, up from –23% in Q4 2024.
Employment: Net employment change was +26%, the strongest quarterly improvement since Q1 2010.
Regional Performance

Home Nations:

Northern Ireland: Workloads +36%, Enquiries +64%
Scotland: Workloads +30%, Enquiries +56%
Wales: Workloads +24%, Enquiries +50%
England: Workloads +21%, Enquiries +18%

[edit] Skills

39% of firms increased workforce size (up from 17% in Q4 2024).
Only 13% reported a decrease in staff numbers.

[edit] Impact of Skills Shortages

61% of firms affected by lack of skilled tradespeople.
49% experienced job delays.
23% had job cancellations.

[edit] Business Outlook

51% of firms have a positive outlookfor H2 2025.

[edit] Comments

Paul Gandy, CIOB President, said: “The issue of skills shortages is one the industry knows all too well, and it continues to create real challenges – for those doing the building, and for the public who face delays and rising costs as a result. With more people now choosing to improve their homes rather than move, it is vital for families and the wider economy that they can access reliable, competent builders delivering high-quality, affordable work.”

“SMEs are the backbone of our industry, yet too often they are held back by issues such as late payments, and barriers to taking on apprentices. If we want a strong, sustainable pipeline of skilled workers, we need to make it easier and more affordable for SMEs to train the next generation.”

“More apprenticeship places and homebuilding skills hubs are welcome steps forward, but we would like to see more done to inspire young people to pursue a career in construction – whether through better in-school careers advice or a dedicated built environment GCSE. The insights from this State of Trade survey are vital in helping us make that case to Government.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “It’s encouraging to see the construction sector getting back on its feet, with builders busier and more confident than they’ve been in months. House building and home improvement are leading the way, and many firms are expanding their teams to meet demand. But the reality is that many homeowners could still face delays or higher costs. Builders are finding it harder than ever to recruit skilled workers and rising prices for materials and wages are putting pressure on businesses. These challenges are slowing down delivery and making it harder for firms to take on new work.”

Berry continued:“If skills shortages and planning delays aren’t addressed there is a risk that the economic recovery will be slowed down and housing targets won’t be delivered. The industry is ready to build, but it needs support to do so. Without it, homeowners may be left waiting, and the UK could fall further behind on the homes that are urgently needed. Action is needed to ensure that the recovery is not just short-lived but sustainable, and that builders have the tools they need to keep Britain building.”

Notes: The FMB have conducted the State of Trade Survey, tracking SME construction trends for over 30 years. The refreshed 2025 edition now runs biannually with CIOB, and is the only survey of its kind to focus exclusively on small and medium-sized (SME) firms throughout the construction sector. The report received 458 responses.

This article is based on two publication that appears on the CIOB news and reserach sites: "State of Trade survey findings published" and "The SME State of Trade Survey, January to June 2025" both dated 2 September, 2025.

--CIOB