The small & medium construction (SME) sector in the UK is optimistic about the construction activity, including housebuilding, though rising costs marked the first three months of 2017.

Key results from the Federation of Master Builder’s State of Trade Survey for the first quarter (January to March) 2017, which is the largest quarterly assessment of the UK-wide SME construction sector, indicates an increase in prices of materials. Approximately, 85 per cent of the builders believe that material prices will rise in the next three months.

While one in two construction SMEs predicted rising workloads in the coming months, just 5 per cent of them predicted a decrease in activity.

Brian Berry, Chief Executive of the FMB, said in a statement, “The survey covers the period before the announcement of a snap General Election, which may well cool consumer demand in the coming months. The results are also tempered by a clear rise in output costs for construction companies. Material prices and wages rose markedly in the first three months of this year, with larger numbers of construction SMEs believing that all three will rise further during the next quarter.”

His comments provide a clear insight into the construction sector, which plays a critical role in the UK’s housing needs. The next three months are critical, as rising costs of materials could directly lead to price inflation of new homes entering the market.