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Skills shortages in the building industry threaten to hold back the economic recovery, according to the latest state of trade survey by the trade association for SME builders, the Federation of Master Builders (FMB).

More than a third of construction SMEs told the FMB they are struggling to recruit the bricklayers they need to stay on top of their workloads, while 27% of firms said they were having difficulty recruiting plasterers.

The survey showed a rise in workload activity for SMEs in the second quarter of 2014

The net balance for overall workloads remained positive for the fifth consecutive quarter, rising by 9%, to +26 in April to June, the highest level recorded since late 2004.

The proportion of firms registering higher levels of activity edged up to 40% from 39% in the first quarter of the year with a 鈥漵ignificantly smaller鈥� percentage of companies reporting a fall, down from 22% to 14%.

This trend is expected to continue over the next three months with the proportion of firms anticipating workloads to decline falling to just 11%, compared to 15% in the first quarter of 2014.

The strongest improvement was seen in the social RM&I sector.

Across the industry, the survey showed that employment levels improved for the second quarter in a row, returning to levels last seen in the third quarter of 2007. Just over a quarter (26%) of firms indicated an increase in their workforce, slightly up from the level of 24% recorded in Q1 2014.

However firms reported the greatest difficulties recruiting bricklayers with plasterers, site managers and supervisors also hard to find.

Brian Berry, chief executive of the FMB, said: 鈥淭he results act as a stark warning that the government must not take the recovery in the construction sector for granted.

鈥淎lthough this snapshot of small construction firms marks the fifth consecutive quarter of positive results, if we don鈥檛 have enough of the right people to complete the work, private and public projects could be stalled across the board.

鈥淟ooking ahead, construction SMEs are still hugely concerned about the impact of the government鈥檚 apprenticeship funding reforms. If they are implemented as proposed, most micro-businesses, which currently train two-thirds of all construction apprentices, are likely to stop hiring apprentices altogether.

鈥�182,000 new UK jobs are expected to be created in the construction by 2018 so this is not the same to jeopardise the ability of small firms to continue their proud history of training apprentices.

鈥淣ot only would this be disastrous for the construction sector itself and the hundreds of thousands of young people who are currently seeking employment, it would also be disastrous for the wider economy which is largely relying on construction and housing to drive the recovery.鈥�