By Francisco Morcillo - Industrial Issues Executive, 19 August 2011
The latest Construction Trade Survey published by the Construction Product Association on the 8th of August showed how public sector cuts were finally having an impact on the Construction Sector.
Some of the key findings of the survey are:
- Product manufacturers benefited from growth in overseas sales in 2011 Q2 and 22% of heavy side and 34% of light side manufacturers expect sales growth to exceed 5% during the next 12 months. Elsewhere in the industry the outlook is subdued.
- 37% of building contractors, on balance, reported activity contracted between 2010 Q2 and 2011 Q2.
- Public non-housing work reduced according to 50% of contractors, on balance, during the year. SME builders reported that workload declined for the 14th consecutive quarter, according to 19% of firms, on balance.
|
 |
- 77% of contractors and over 90% of product manufacturers, on balance, suffered higher materials costs year-on-year in 2011 Q2. Some manufacturers during Q2 benefited from Sterling’s attractiveness relative to both the euro and dollar and increased their export sales, resulting in an additional 18 per cent of manufacturers turning to overseas markets compared with the previous three months.
This has been a welcome bounce back from the poor conditions experienced during the winter months.
According to the Construction Product Association, the public sector have fallen only about 1% this second quarter of 2011, so there is plenty more contraction to come.
The latest Construction Industry forecast, released in summer 2011 by the Construction Products Association indicated how the prospects for construction over the next three years are poor with no significant grow until 2014 or even 2015. The construction output for this year is forecasted to fall over 1% with public investment in construction falling sharply, no offset by the slight rise in private sector construction.
The real effect of the public spending cuts from the Comprehensive Spending Review will be shown through 2012 when construction from public sector is set to fall a further 12%, meaning an overall fall of the industry of 3%. The forecast states that construction is predicted to be flat in 2013, with private sector finally offsetting public sector. It is only in 2014 that the industry is expected to grow a modest 3.4% and followed by a 5% in 2015.
We cannot forget that, as in every forecast, other factors could undermine these results. Contagion effects from countries struggling with excessive debt, rising costs and concerns regarding localism and Green Deal are risks that can affect the economy as a whole and therefore slow the construction industry growth.
For more information please click the link below...
http://www.constructionproducts.org.uk/
|
.png)
