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Half of contractors positive about 2012 despite spending cut drag

Nearly half of contractors are positive about 2012, despite nine out of ten firms saying they expect public spending cuts to drag on the industry, the Confederation of British Industry said today.

An online survey of 635 contractors by the CBI and Speedy Hire found that over the next five years, 86 per cent of firms expect public spending cuts to have a significant or very significant impact on their business.

But despite this, 42 per cent expect growth in 2012. A quarter of firms expect business to decline next year. Asked what would be the most effective boost for the construction sector, a third of respondents cited infrastructure spending.

The CBI said the survey portrays a sector well-placed to boost skills and create jobs, with more than three-quarters of firms planning to maintain or increase spending levels on training and investment in apprentices in the coming year

Dr Neil Bentley, CBI deputy director-general, said firms looking for certainty and guaranteed infrastructure spending were given “grounds for optimism” with George Osborne’s autumn statement.

He said:  “The government has recognised the role construction can play in building a path to the recovery, and the sector is more than ready to play its part in generating economic growth.

“But the government must now move quickly to bring infrastructure projects to market so the sector can gear up and create jobs.”

Nearly two-thirds see planning as one of the greatest barriers to growth, while half of those in house building also cited mortgage availability.

Forty per cent of respondents said the availability of finance had deteriorated in the past 12 months, while 52 per cent reported no change, and only 8 per cent said they had seen an improvement, resulting in a negative balance of -32 per cent. Firms expect credit conditions to deteriorate further in the next twelve months, with a negative balance of -20 per cent.

Steve Corcoran, CEO of Speedy Hire, said:  “Construction has an economic multiplier effect, with every £1 invested adding nearly £3 to GDP. Construction investment has the potential for job-creation in every region of the UK, and it has never been more vital than now.”

The survey was conducted online between 30 September and 21 October 2011, with responses from CEOs, managing directors, and senior managers from firms across the UK.

Other stats
45 per cent of small and medium-sized businesses reported a deterioration in finance availability in the past 12 months, and more than a 37 per cent expecting a further deterioration in the coming year.
83 per cent of construction firms plan to maintain their spending level on training or even increase it in the coming year, and a similar proportion (77 per cent) intend to maintain or expand their investment in apprentices in the same period.
56 per cent of respondents say they have difficulty in finding staff with appropriate skills.
86 per cent of firms report that sustainability is an important consideration for their clients.
69 per cent measure their sustainability in terms of water, waste, carbon contribution and energy use.
53 per cent consider the carbon footprint of their suppliers as part of their selection process.  
61 per cent see the UK’s planning system as a barrier to their operations.
50 per cent said of mortgage availability is damaging house building, followed by consumer confidence 17 per cent, business finance 14 per cent, and planning 10 per cent.


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