A SHORTAGE of raw materials and skilled workers is holding back subcontracting firms as they try to recover from the virus crisis, according to a study.

Financial services provider Bibby Financial Services (BFS) warned that the problem was threatening to “dampen” economic growth.

Its survey of 250 subcontractors found that the main concern was the increasing cost of raw materials such as steel, plastic, concrete and plywood.

Almost half of respondents said they were having problems hiring skilled workers.

The impact of Brexit continued to be an issue, with more than half of those questioned saying the Government should do more to ensure that tariffs on goods to and from the EU are avoided, to avoid a further increase in the price of raw materials.

Sharon Wiltshire, of BFS, said: “It has been a difficult year for the construction sector, and for subcontractors especially.

“It is likely that the true impact of Brexit-related skills and raw materials shortages, and the winding down of Government support measures, is yet to be realised.

“With subcontractors typically asked to pay a large proportion of labour and materials costs upfront, they are highly dependent on having a working level of cash flow at all times.”