The ONS has reported that the last quarter of 2010 saw output fall by 2.5%. This can be attributed to falling demand, inflation and the poor weather. The Construction Products Association say expectations for 2011 are mixed with the majority of building materials manufacturers expecting sales during the first half of this year to be below or the same as 2010.
A number of industry commentators have predicted the end of the construction recovery. Commenting on the latest RICS Construction Market Survey, RICS chief economist Simon Rubinsohn said: “The bigger picture here is of an industry under significant pressure as public spending cuts begin to bite, while there is little sign of a private sector recovery across large parts of the country.”
Douglas McWilliams, Chief Executive of the Centre for Economics and Business Research, commenting on his organisations latest review said “We expect house prices to grow tentatively over the coming years, given that household incomes are being squeezed and banks are still wary of lending. There is currently significant uncertainty in the market caused by the Government’s spending cuts and a choppy recovery, which has greatly impacted transaction levels.”
The Construction Skills Network report shows that, despite the industry performing better than expected in 2010; the sector is expected to contract by 1% during 2011 with employment levels likely to drop by up to 76,000 before the sector returns to growth. Judy Lowe, Deputy Chairman of CITB-ConstructionSkills, said: “The next couple of years will be really tough for the industry. But … there are signs of longer-term confidence returning to the market.”
After all of this depressing information, I’ve tried to find something positive to add. So would quote from the Glenigan weekly newsletter “the value of projects being restarted has increased, and this should feed through into a growth in private sector construction over the year.” I’ll also quote Noble Francis writing in the Barbour ABI Construction Review for January “There is still £97 billion of work available this year. House builders, rail and energy contractors will all be looking for growth.”
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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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