PESSIMISM GRIPS CONSTRUCTION INDUSTRY

The latest Construction Trade Survey published on Monday this week showed that construction activity fell sharply in Q3, despite a return to growth for the UK economy as a whole. Of greater concern, however, is the forward looking indicators of orders and enquiries, were also negative, reinforcing concerns that the sector is unlikely to experience growth until at least 2014.

This is the first time there has been a decline in all construction sectors. Whilst the public sector construction activity has been falling for some time as a result of the government’s cuts, private sector activity is also now falling sharply. On top of this bad news, infrastructure work also declined in Q3. Given all the government’s rhetoric about stimulating infrastructure activity, these figures provide further evidence of the Tory-Lib Dem Government’s utter incompetence.

Speaking about the survey, Stephen Ratcliffe, Director of the UK Construction Group, said: “These figures show how difficult trading conditions continue to be. With declining public sector spend and a lack of confidence amongst private investors, action is urgently needed to kick-start the construction sector.”

Key survey findings include:

• Public new housing and public non-housing were the worst hit sectors for building contractors, with a balance of 38% and 34% respectively, reporting falls in output

• 29% and 27% of building contractors reported that, on balance, output fell in the private industrial and private commercial sectors respectively

• 20% of heavy side product manufacturers and 41% of light side manufacturers reported that, on balance, sales fell in Q3

• 26% of contractors reported that, on balance, orders fell in the third quarter

• 17% of civil engineers reported a fall in workload, on balance, during Q3

• 50% of large and medium sized building contractors, on balance, suggested that tender prices reduced in 2012 Q3

• 32% of building contractors, on balance, reported rises in costs, marginally higher than the 30% in Q2

• The proportion of contractors, on balance, reporting falls in profit margins remained unchanged at 49%