Having reported growth in construction for Q2 which many of the industry commentators did not believe, the Office for National Statistics, when issuing its quarter 3 report, has also downgraded Q2. This now shows growth in Q2 of 6.8% rather than the 9.6% they had previously reported. The reported growth for Q3 was 4%, which is 8.6% up on the equivalent quarter in 2009. The report shows that new work has increased at about twice the rate of repair and maintenance.
Despite the publication of the governments Comprehensive Spending Review in October there is still a great deal of uncertainty in the sector. As individual departments publish their plans it is becoming apparent that the picture painted by the CSR is more rosy than the reality. The Construction Products Association’s most recent trade survey indicates that prospects for construction for the remainder of 2010 are looking increasingly unsure.
In 2011 it is expected that housing will be one of the worst hit sectors. In their latest monthly UK Housing Market survey RICS reported that activity in October had dropped for the fifth consecutive month. Lack of mortgage finance and buyer caution were blamed for this. A view which was supported by Barratt, Bovis and Redrow all of whom reported their performance in the last week or so. Each developer also reported improved revenue or margins and said that they had seen their mix of homes move away from apartments towards increased sales of larger family homes. This reflects the problems first and second time buyers are having securing mortgages, while those with greater equity in their homes can still borrow.
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Chris Ashworth, founder of Competitive Advantage Consultancy, provides strategic marketing, research and training services to the construction industry. He is a member of the organising committee for the Chartered Institute of Marketing Construction Industry Group (CIMCIG). |
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