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Construction News
10/02/2014
Construction Activity Increases
The latest Construction Trade Survey, published today, shows that construction activity rose in Q4, marking the first time in over five years that the industry recorded three consecutive quarters of growth.
Firms across all areas reported increased output, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.
Commenting on the survey, Dr Noble Francis, Economics Director at the Construction Products Association, said: "The recovery, which started in 2013 Q2, continued, though risks remain. The rises in activity were slower than in previous quarters, and orders for new work similarly decelerated, potentially highlighting uncertainty amongst contractors as to whether the recovery would be sustained.
"Growth was driven by the housing sector, though this was partially offset by a drop in repair and maintenance work. Building contractors, SMEs and civil engineers reported rises in output, although Q4 levels were not as strong as Q3. Indeed, only product manufacturers saw activity levels higher in Q4 than Q3.
"Tender prices rose again this last quarter, especially for building contractors and civil engineers. These rises, however, were mitigated by growth in cost inflation, largely owing to increased labour, energy and transport costs. As a result, most contractors reported a fall in profit margins despite the improving demand over the past 12 months.
"In addition, 41% of building contractors reported difficulties recruiting bricklayers and 32% reported difficulties recruiting carpenters."
Stephen Ratcliffe, Director UKCG, said: "While contractors reported a slowdown in output growth this quarter, the trend over the last year remains one of modest recovery. Unlike housing, the broader construction sector remains a lagging indicator and we would expect the main growth to come later than the wider economy.
"Rising labour costs highlight the need to tackle skills shortages as we move towards recovery, and for a clear pipeline of future work so firms have the certainty to invest in apprenticeships and other long term training programmes."
(CD/JP)
Firms across all areas reported increased output, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.
Commenting on the survey, Dr Noble Francis, Economics Director at the Construction Products Association, said: "The recovery, which started in 2013 Q2, continued, though risks remain. The rises in activity were slower than in previous quarters, and orders for new work similarly decelerated, potentially highlighting uncertainty amongst contractors as to whether the recovery would be sustained.
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"Growth was driven by the housing sector, though this was partially offset by a drop in repair and maintenance work. Building contractors, SMEs and civil engineers reported rises in output, although Q4 levels were not as strong as Q3. Indeed, only product manufacturers saw activity levels higher in Q4 than Q3.
"Tender prices rose again this last quarter, especially for building contractors and civil engineers. These rises, however, were mitigated by growth in cost inflation, largely owing to increased labour, energy and transport costs. As a result, most contractors reported a fall in profit margins despite the improving demand over the past 12 months.
"In addition, 41% of building contractors reported difficulties recruiting bricklayers and 32% reported difficulties recruiting carpenters."
Stephen Ratcliffe, Director UKCG, said: "While contractors reported a slowdown in output growth this quarter, the trend over the last year remains one of modest recovery. Unlike housing, the broader construction sector remains a lagging indicator and we would expect the main growth to come later than the wider economy.
"Rising labour costs highlight the need to tackle skills shortages as we move towards recovery, and for a clear pipeline of future work so firms have the certainty to invest in apprenticeships and other long term training programmes."
(CD/JP)
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