Opinion Former Article

CPA: Construction Continues to Fall but Some Positive Signs

The latest Construction Trade Survey published today shows that construction continued to suffer during 2012 Q1 but there were positive signs for some parts of the industry.

Conditions in the UK building market were very subdued and orders show that conditions are only likely to worsen during 2012 with the full extent of public sector cuts yet to be fully realised. Yet, there was an improvement in industry conditions for some contractors in Q1, with projects to extend and improve the country’s rail network and increase energy capacity providing a timely boost.

Commenting on the survey, Noble Francis, Economics Director at the Construction Products Association said: ‘It’s good to see that some companies are benefitting from schemes such Crossrail, Europe’s largest construction project, and projects in the energy sector such as nuclear and renewables. Yet, government cuts have begun to hit many parts of the construction industry and public sector construction will only deteriorate further given the scale of the cuts. Private sector construction is not growing quickly enough to offset this, especially with the largest construction sector, private commercial slowing. Work in the £22 billion commercial sector is relatively subdued outside of a few high profile offices projects within Central London and even in London, work is beginning to slow with projects, such as The Shard, finishing and relatively few replacements in the pipeline near term.’

Speaking about the survey Stephen Ratcliffe, Director UKCG, said: ‘Market conditions remain challenging but we must not lose sight of the fact that there is still a £100 billion per annum market in construction. The opportunities could be more evenly spread – between both north and south and infrastructure and building. Central Government could help in getting on with delivering the much delayed school building programme and more local authorities need to wake up to the fact that investment in infrastructure means local growth and jobs. The Local Government Association’s rejection of the benefit of publishing a pipeline of infrastructure investment shows how out of touch some local authorities are with the need to work harder to deliver investment and growth.”

Julia Evans, Chief Executive of the National Federation of Builders added: ‘Construction orders are falling and costs are rising. Public borrowing levels are still high and government departments are bracing themselves for another round of spending cuts. We are not looking at a recipe for growth but at another challenging quarter when bank holidays, Jubilee celebrations and the Olympics will all affect productivity, making it unlikely that Q2 and Q3 figures will be any more encouraging than those for Q1.’

Key survey findings include:
19% of large and medium sized building contractors, on balance, stated that workloads reduced, on an annual basis in Q1 (compared with 2011 Q1).
Orders weakened compared with the last three months of 2011 according to a quarter of large and medium sized building contractors, on balance.
21% of SME builders, on balance, saw workloads reduce in Q1.
3% and 17% of specialist contractors stated that, on balance, orders and enquiries rose in Q1.
Employment prospects are subdued for large, medium and small building contractors but manufacturers and civil engineers expect to increase headcount.

ENDS
Note to Editors:
CONSTRUCTION PRODUCTS ASSOCIATION:
The Construction Products Association represents the UK’s manufacturers and suppliers of construction products, components and fittings. The Association acts as a single voice for the construction products sector, representing the industry-wide view of its members. The sector has an annual turnover of £50 billion and accounts for 40% of total construction output.

The Construction Products Association undertakes a comprehensive quarterly survey of its members operating across this sector.

National Federation of Builders:
The National Federation of Builders (NFB) represents over 1,500 builders and contractors across England and Wales. In addition to providing specialist advice and business services, the Federation, with a network of eight regional offices, lobbies local, national and European government on a range of issues to sustain positive trading conditions for members. With origins dating back to 1876, today's NFB is a modern organisation providing the medium sized contractor and smaller builder with an unparalleled package of services.

National Specialist Contractors Council:
The National Specialist Contractors Council (NSCC) brings together the common aims of specialist trade organisations within the construction industry and is the authoritative voice of Specialist Contractors in the UK. NSCC has 32 member organisations that collectively represent over 7,000 Specialist Contractors engaged in the planning, design, construction, refurbishment and maintenance of the built environment in both the commercial and domestic sectors. By using the collective strength of the specialist sector, NSCC has the influence to make a real difference to how the UK construction industry operates.

CIVIL ENGINEERING CONTRACTORS ASSOCIATION:
The Civil Engineering Contractors Association has over 300 member firms that carry more than 80% of all civil engineering work in Great Britain. The CECA survey of civil engineering workload trends, in which more than a third of the membership takes part, tests for changes over the past year in contractors’ workload, workforce, order books, cost trends, and tender prices. It also examines the supply situation for key resources, and contractors’ expectations of trends in new orders and employment in the coming 12 months.

UK CONTRACTORS GROUP:
The UK Contractors Group represents more than 30 leading contractors operating in the UK. Its mission is to represent contractors’ interests to government and key clients and to encourage contractors to work together to promote change and best practice, especially on health and safety and environmental issues. UKCG also works closely with the CBI Construction Council to ensure that contractor’s interests are properly reflected in the wider business agenda.

FEDERATION OF MASTER BUILDERS
The FMB is the largest employers’ body for small and medium sized firms in the construction industry, and with 11,000 members, it is the recognised voice of small and medium sized builders. FMB is committed to promoting excellent standards in craftsmanship and assisting builders to improve levels of building performance and customer service. Within its membership, the FMB has around 4180 firms which engage in house building, either as their primary function or as part for the suite of building services they provide, but most are primarily active in the domestic RM&I market.

FOR FURTHER INFORMATION CONTACT:
Noble Francis, Economics Director
Construction Products Association
Tel : 020 7323 3770
Mobile: 0791 261 2882
Fax : 020 7323 0307
E-mail : noble@francis.com

Simon Storer, Communications and External Affairs Director
Construction Products Association
Tel: 020 7323 3770
Mobile 07702 862 257
Fax: 020 7323 0307
E-mail: simon.storer@constructionproducts.org.uk


Nicola Smith
External Affairs Manager
Construction Products Association
26 Store Street
London WC1E 7BT
Tel: 020 7323 7247
Fax: 020 7323 0307
nicola.smith@constructionproducts.org.uk
www.constructionproducts.org.uk

Registered Office as above
Company Number 386 1752
Registered in England   

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