It’s likely to be an important year ahead for tradespeople, following a 2017 filled with ups and downs.
Tradesmen looking ahead to 2018 should be aware of economic changes on the horizon, and continued growth in the number of tool thefts – but it’s not all bad news.
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Here, we’ve outlined some of the issues that are likely to affect tradesmen in the coming 12 months, both good and bad.
1. The construction market is slowing
The latest figures suggest a slowdown in growth in the construction sector. The Construction Products Association expects the sector to grow by just 0.7 per cent during 2018, which is the slowest rate in six years.
This is attributed to rising costs, along with falling wages and generally sluggish economic growth. This poses some potential problems for tradesmen, especially as the economic outlook begins to look more unclear for the coming years.
In fact, the Autumn Budget had mixed news for the economy in the coming Parliament. Many forecasts were revised down, and it is now not expected that the economy will begin to recover for several years.
2. Tool theft is on the rise
Tool theft is an ongoing problem for tradesmen, but it’s important that you keep your eyes and ears open as it’s on the rise – and the trend is set to continue.
A Simply Business survey earlier in 2017 found that 98 per cent of tradesmen are worried about tool theft, and with good reason.
Thefts were up 30 per cent on the year in April, with Yorkshire and the Midlands the major hot spots.
Tradesmen are particularly at risk from so-called ‘peel and steel’ thefts, although van manufacturers are now taking steps to make their vehicles more secure.
3. But there’s good news for van drivers
There is, however, good news if you drive a van.
Tradespeople will be relieved to hear that vans will be exempt from the increase in 2018, with Chancellor Philip Hammond declaring: “No white van man or woman will be hit by these measures.”
4. Work in London? Remember the Congestion Charge
Tradesmen travelling in London should pay close attention to the Congestion Charge in 2018.
It was announced in December that the fine for failing to pay the charge would rise to £160, or to £80 from £65 if the penalty is paid early.
The change follows the introduction of the T-Charge, which is designed to combat pollution in the capital. The T-Charge is levied in addition to the Congestion Charge, at a rate of £10 per day.
5. The property market looks unclear
The future of the UK property market is also looking murky. Many commentators and industry insiders believe that the market is heading for a major correction, and prices are already beginning to drop in many parts of the country. Properties are also taking significantly longer to sell.
Crucially though, house prices in London are now at a record 14.5 times the average income, meaning that home ownership is out of reach for an increasing number of people. Of those already on the property ladder, fewer are selling and more are instead choosing to stay put.
The trade professions are also impacted by the tax treatment of refurbishment versus new build. Work done to refurbish existing properties attracts VAT at 20 per cent, but that done on new properties is generally zero rated.
This means that it is often more attractive for large developers to knock properties down and build new ones – but at the same time, the appetite for large-scale new build properties, especially in the capital, seems to be declining, and developers are instead choosing to eke out projects more slowly on land that they already own in order to maximise profits.
6. More millennials set to go self-employed
The number of small business owners is set to rise in 2018, and much of this growth is likely to come from young people. This could see many current employees deciding to go it alone, which will inevitably impact those tradespeople currently working with staff.
If you know someone looking to go self-employed in 2018, why not direct them to our guide to going self-employed in the UK.
7. Consumer spending is contracting
Finally, the issue looming perhaps largest for tradesmen is the ongoing contraction in consumer spending. The public’s spending power is expected to shrink in 2018 as the impact of the collapsing pound is combined with rising inflation.
Crucially, the cost of borrowing is also set to rise. In tandem with stagnating real wages, this could cause problems for indebted households across the UK.
The rising cost of debt is also likely to impact businesses, potentially putting a pause on repair and refurbishment projects. In fact, a recent survey from insolvency experts Begbies Traynor suggests that half a million businesses could be set to go bust as the rising cost of servicing loans outstrips their ability to pay.
Are you optimistic about your trade in 2018? Let us know below.