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Construction is “holding back the economy”

Contractors’ workloads remained flat for a second consecutive quarter, while order books were down for the third consecutive quarter, according to a new survey.

The Civil Engineering Contractors Association’s latest workload trends survey also revealed that just 1 per cent more firms reported rising orders than those showing a decline last year.

Welsh firms saw their worst orders and expectations for almost three years, with 52 per cent reporting lower workloads compared to 12 months ago.

English and Scottish contractors remain cautiously optimistic with 38 per cent of English firms and 45 per cent of Scottish firms reporting an increase in workloads, according to CECA.

“The construction sector is holding back the rest of the economy – whereas it should be acting as a motor for growth.”

CECA director of external affairs Alasdair Reisner

Employment in the infrastructure sector showed signs of improvement, but CECA director of external affairs Alasdair Reisner said it is “too early to say that the infrastructure sector has entered into a sustained recovery”.

“Since the onset of the financial crisis, we have seen such false dawns before. Our members continue to report increased costs and challenging trading conditions,” he added.

63 per cent of respondents reported an increase in costs compared to last year. Tender prices also remained flat or fell, squeezing contractors’ margins.

Mr Reisner said: “The construction sector is holding back the rest of the economy – whereas it should be acting as a motor for growth.”

He added that the government can address these challenges in its forthcoming spending review.

“We need to unleash growth by means of infrastructure provision, address the infrastructure deficit, and secure the UK’s recovery.”

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