Almost two-thirds of construction firms in Wales are more optimistic about their future prospects than they were 12 months ago, according to a new report.
The survey of over 600 companies by law firm Irwin Mitchell did highlight however growing concerns amongst senior decision makers about the cost of labour – with 61% of expecting wages to rise during the rest of 2014.
According to Irwin Mitchell, this is being caused partly by a skills shortage in the sector.
The law firm also highlights the growing issue faced by main contractors who are seeing tender return prices increasing due to subcontractor inflation following a long period of flat prices.
The survey also revealed some significant differences in optimism in different parts of the UK. The figure for Northern Ireland stood at 75% whilst in Scotland the figure was 64%. Within England, levels of business confidence were highest in the East Midlands (84.6%).
Julie Morrissy, Construction Partner at Irwin Mitchell, said: “On the whole, these results reflect an improving construction sector. Not only are we seeing the impact of strong demand for house building, the sector is being buoyed by mid to high end residential developments, offices, commercial space and logistics.
“The key now is to ensure that this positivity is sustained into the longer term. The opportunities exist but there are threats and it is vital that companies deal with them effectively. The availability of materials is a concern, but with the majority of firms expecting wages to increase during the rest of the year, it’s clear that the lack of skilled workers could also hamper future growth.”