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Contractors report 12th straight quarter of activity growth in Q1

Construction activity grew for the 12th successive quarter, according to the Construction Products Association’s Q1 trade survey.

Product manufacturers, civil engineering firms, SMEs and specialist contractors all reported an increase in workloads and output increases in the first three months of the year.

On balance, 20 per cent of civil engineering firms and 38 per cent of specialist contractors saw workloads grow compared with a year earlier, up from 5 per cent and 31 per cent respectively in Q4 2015.

There was some evidence of a slowdown for main contractors: on balance, 19 per cent saw workloads grow in the first quarter of 2016 compared with a year earlier, down from 23 per cent in Q4 2015.

Main contractors reported a drop in orders across the board in Q1, especially in the public sector, with a balance of 42 per cent reporting a downturn in public housing orders and 28 per cent reporting a fall in public non-housing.

Private commercial was the strongest performing sector for main contractors in Q1 compared with a year earlier, but private housing output fell back.

However, the picture was more positive for specialist contractors and SMEs, with business enquiries improving for both sets of firms during Q1.

Rising costs continued to be a problem for the sector, according to the CPA.

Costs increased for a net balance of 58 per cent of main contractors and 74 per cent of civil engineering firms during the quarter, driven by growth in wages and salaries coupled with an ongoing shortage of available trades and skilled workers.

Fuel costs continued to fall, with more than half of heavy-side product manufacturers reporting a decline.

In Q1, 24 per cent of building contractors reported that they were paid in under 30 days; 24 per cent reported payment between 31 and 45 days; and 32 per cent said they were paid within 46-60 days.

Only 4 per cent of contractors reported a payment period of more than 90 days.

Commenting on the data, Build UK chief executive Suzannah Nichol said: “There continue to be mixed messages in terms of growth; however, industry intelligence shows increasing levels of activity over the last quarter.

“Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels.”




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