The survey, which canvassed the views of a specialist panel of FSB members in the construction sector, showed that 59 per cent of respondents said their trade had decreased in the last six months and that 37 per cent were concerned their financial prospects for the future were poor.
The lack of demand in the private and public sector was the key factor identified by 49 per cent of small firms as most negatively affecting their business and causing the downward spiral in trade.
Small firms have identified the VAT rate on renovating homes - currently at 15 per cent - as a concern, as it prevents potential customers from hiring their services in new building projects.
The FSB is working with the Federation of Master Builders on a campaign calling for the VAT rate to be lowered to a flat rate of five per cent to give homeowners the incentive to spend and give a boost to the builders and small firms in the construction industry at an already difficult time.
Other concerns about the decrease in trade cited in the survey were the cost of resources (nine per cent) and regulatory burden (12 per cent). Some 53 per cent of firms also said more and more companies had started paying them later over the last six months.
