Two fifths of small and medium-sized enterprises (SMEs) operating in the construction sector say that the most positive action the new government could take to benefit their company would be to reduce excessive regulation.

This is according to the findings of the June 2015 Close Brothers Business Barometer, a quarterly survey of 500 SMEs across various industries that canvasses owners for their opinion on financial and economic issues.

The merchant banking group’s online survey found that 19% of construction firms polled most want the government to take more action on late payments, while 10% prioritised receiving more help to access finance. A further 8% think a freeze in business rates would be the most beneficial type of support.

The managing director of the Industrial Equipment Division at Close Brothers Asset Finance, Steve Gee, said: “Regulatory schemes or ‘red tape’ can create a large, costly administrative burden for construction businesses, particularly when it comes to tendering processes and health and safety.

“Quite often contractors find themselves having to submit paperwork to many different schemes, which somewhat penalises smaller businesses that lack the resources to deal with the administrative demands of winning new business.

“Any action taken to cut down on the time costs of compliance could make a big difference to those who feel its impact most, more specifically it could reduce overheads and improve profit margins.”

More than half (58%) of businesses surveyed in the industry state that trading conditions for their business are improving, with 40% expecting to expand in the next 12 months.

Mr Gee added: “Those figures are extremely encouraging, particularly as the Office for National Statistics has just released statistics showing that building activity declined between April and May.

“I think this shows us that while the outlook is positive overall, it is essential we continue to support the sector in any way possible.”