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Construction 'continues to suffer' in 2012, says CPA

Construction continued to suffer in the first quarter of 2012, despite some positive signs in parts of the country, according to the Construction Products Association.

The CPA’s Construction Trade Survey, released this morning, says one in five builders have reported a fall in workloads compared with the same time last year.

It comes after a slump in construction output was blamed for pushing the country into a double dip recession. Last week, CN reported that a total of 566 construction firms went into voluntary liquidations in the first three months of this year.

But it also comes after the latest Markit/CIPS research reported “continued recovery” in the sector. There was also a more upbeat feedback from the National Specialist Contractors Council survey.

The CPA mitigates some of the gloom with positivity in the rail and energy sectors, which it says have provided a “timely boost”.

But generally, it says conditions in the UK building market were “very subdued” in Q1, while orders show that conditions are “only likely to worsen” during 2012 as the full extent of public sector cuts come through. 

Noble Francis, economics director at the CPA, said: “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.”

Stephen Ratcliffe, director at the UK Contractors’ Group, said “we must not lose sight of the fact that there is still a £100bn per annum market in construction”. 

But he added: “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.£

He said the 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.

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