Rising material costs and a lack of skilled workers will present "significant challenges" to Scottish builders in the future, according to the Federation of Master Builders (FMB).

The organisation's latest State of Trade Survey for Q4 2016 revealed SME builders experienced strong growth in the final three months of 2016, with workloads rising in the final quarter.

Gordon Nelson, Director of FMB Scotland, said the figures demonstrate an "underlying resilience" in the sector "despite the pessimistic economic forecasts made in the build up to the EU referendum".

However, Mr Nelson added future rises in materials costs and a scarcity of tradespeople could create problems for the sector.

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"We've been experiencing severe skills shortages in trades such as carpentry and roofing for quite some time and we're now beginning to see this problem spread to other core roles such as plumbers and site managers," he said.

"With Scottish Ministers planning major investment in new housing, infrastructure and existing homes, the Government and industry must give serious thought to how we can work together to close the skills gap.

"Currently the Scottish Government is making the case for Scotland remaining a part of the EU, but assuming that probably isn't possible, it must also remind the UK Government of the need for a responsive and flexible immigration system to replace the free movement of people.

Mr Nelson added if the SME sector is to continue to grow this year, house building will be a "critical driver".

"The Planning Bill that is due to be introduced later this year is a fantastic opportunity for the Scottish Government to ensure that the planning system enables more small sites to come forward," he continued.

"The cumulative potential of small sites to deliver thousands of new homes in Scotland is huge. Smaller locally-based house builders stand ready to take up those opportunities and play a more prominent role in addressing the country's housing crisis."

(LM/MH)