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New work on offer despite gloomy forecasts

Contractors should look to non-traditional ‘niche’ areas to counteract the forecast fall in construction activity, economists have said.

Overall activity across the construction sector is set to fall by 0.5 per cent in 2011 and by a further 2.8 per cent in 2012, according to the latest forecasts from the Construction Products Association.

The outlook for this year has improved slightly compared with the CPA’s survey three months ago, when it predicted activity in 2011 would fall by 0.8 per cent. But the forecast for 2012 has worsened from a predicted drop of 2 per cent in the last survey.

However, alongside the pessimism there are areas where contractors can find opportunities for new work.

The commercial office market is looking promising, with expected growth of 3.5 per cent this year, 10 per cent in 2012 and 18 per cent in 2013, according to the CPA forecasts.

This effect will be regional, as 40 per cent of the total office market is within central London, said CPA economics director Noble Francis (pictured).

Construction jobs following from investment in the electricity sector could also provide opportunities, he said.

The energy sector is set to grow by 14.5 per cent this year, 15.5 per cent the year after and 22.5 per cent in 2013.

“Energy opportunities are rife due to the planned nuclear power station activity and wind farms,” Dr Francis said.

“But while a lot of the work here will be in the power station infrastructure, there are potential opportunities in the buildings surrounding it, as these stations will need operational support.”

Dr Francis said construction companies should look for opportunities in growing subsectors, as there was no reason why they could not move into these areas just because they do not traditionally operate in them.

Looking beyond the obvious types of work within these areas could present opportunities.

“Contractors should look to move into these growing sectors, as there are niches within them where they can find work.

“Projects such as those planned by Network Rail, for example, are not just about track building.

“A lot of it is major station refurbishment and that is high value output,” he said.

Meanwhile, the latest research from industry economists Experian stated that employment prospects for the industry - which have now fallen every month since January 2008 - remained ‘gloomy’.

The employment index was at 33, a drop of three points on the previous month and the lowest since May 2009.

 

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