The ONS has published its latest figures for new orders, which do not make encouraging reading. New orders for Quarter 2 of 2011 fell by 16.3% compared with Quarter 1 of 2011 and fell by 23.2% compared with the same quarter in 2010. The total volume of all new orders is now at its lowest since the third quarter of 1980.
It’s very hard to find anything encouraging in these figures; Private Industrial is the only sector which is up (6.6%) on the previous quarter and this is still below the equivalent quarter in 2010, it is also the smallest of the sectors measured in the report. Private Housing is up on the equivalent quarter in 2010, but below every quarter since.
This poor performance has been confirmed by Savills’ who report that Commercial development activity fell in August at its sharpest rate for 11 months. Within London, activity was up by 11.7%, although the rest of the South-East saw a drop of 4.1%, and there was a 3.5% fall over the rest of the UK. One opportunity that Savills have identified is that an estimated 700 million sq ft of commercial floor space may need to undergo an energy efficiency overhaul by 2018.
Against this concerning news, there have been reports of strong performance from some of the UK’s larger contractors. Mace reported an increase in revenue of 17% and increase in profits of 9% for 2010. Another strong performance came from Vinci UK with a 17.3% increase in revenue and 15.7% increase in profit for the first half of 2011. No doubt companies will struggle to continue this performance, but it should put them in a strong position to cope with the slowing of the market.
During September and October Chris will be running a programme of one day training courses on sales and marketing subjects in London. See details of courses and discounts available to Voltimum readers.
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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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