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Tue October 20 2020

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Construction industry facing another year of decline

8 Feb 10 The UK construction industry continued to shrink during the final quarter of last year, and no recovery appears likely during 2010, according to the latest Construction Products Association trade survey.

The UK construction industry continued to shrink during the final quarter of last year, and no recovery appears likely during 2010, according to the latest Construction Products Association trade survey.

Some 78% of heavy side manufacturers saw output fall for the ninth consecutive quarter and three-quarters of them do not expect sales to grow significantly during the next quarter.

The survey suggests that the construction industry will continue to contract for a further year, due to rising material costs and increasing fuel and energy prices, together with decreasing orders and enquiries.

Association economics director Noble Francis said: “The continuing decline in workloads across the construction industry is of great concern, especially given that the situation has been exacerbated by rising energy and raw materials costs.

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“This, combined with falling tender prices, is placing increasing pressure upon an industry that has now been in decline for two years.

“The chancellor’s confirmation in December 2009 that public spending on construction will fall by more than 50 per cent during the next four years only provides more concern for the industry following last year’s sharpest fall in construction on record and risks delaying any potential recovery in 2011.”

Other findings of the survey were:

  • 89% of light side product manufacturers said they anticipated sales not to change significantly during the first quarter of 2010.
  • 91% of building contractors said order books during the fourth quarter of 2009 fell in the industrial sector (a record low for the Construction Trade Survey).
  • 75% of light side manufacturers and 33% of heavy side manufacturers reported that costs had risen, with the majority citing raw material and energy costs.
  • 63% of building contractors reported declining profit margins during the final quarter of 2009 due to falling tender prices.

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