Construction News

Tue October 27 2020

Related Information

Construction shrinks for seventh consecutive quarter

13 May 10 Overall construction activty in the UK contracted for the seventh consecutive quarter in 2010 Q1, according to the latest Construction Products Association Trade Survey.

Overall construction activty in the UK contracted for the seventh consecutive quarter in 2010 Q1, according to the latest Construction Products Association Trade Survey.

Key results in the survey showed that enquiries remain subdued and order books depressed, and with pressure on raw materials prices continuing to strengthen, the industry can expect operating conditions to deteriorate further as 2010 progresses.

A negative balance of 24% of construction product manufacturers and suppliers saw a fall in sales compared with a year earlier.

Particularly badly hit were manufacturers and suppliers of 'heavyside' products where 75% of heavyside firms reported lower sales volumes, not helped by the adverse weather at the start of the year.

In contrast those making 'lightside' products saw an improvement in trading conditions as firms started to re-stock.

Related Information

However, the survey showed something of an improvement in manufacturers’ optimism about future short-term trading conditions, but 50% of firms still expect sales to decline in Q2, slightly more than the 45% than expect to see improvement.

Building contractors also reported falls in output in the first quarter of 2010 with, on balance, 25% seeing ouput lower than the same quarter in 2009.

Of particular concern was that over 50% of contractors stated that orders for work in publicly funded projects such as health and education had declined in the first quarter of the year as a result of a hiatus on the letting of public sector projects in advance of the Election.

Key survey findings are:

  • 78% of light side manufacturers reported an increase in sales in 2010 Q1 compared to 2009 Q1, but sales volumes were down for 75% of heavy side manufacturers.
  • Sentiment about the future, whilst still negative, has improved since the last survey. 40% of light side manufacturers and 38% of heavy side manufacturers expect sales to rise quarter-on-quarter in 2010 Q2.
  • Inflationary pressures persist. 80% of light side and 37% of heavy side manufacturers reported a rise in unit costs in 2010 Q1, with raw materials and fuel/energy costs being the main drivers. Employment levels and wages, however, continued to fall.
  • Sterling’s persistent weakness has increased UK manufacturers’ competitiveness overseas and 72% of light side and 20% of heavy side reported further increases in exports in 2010 Q1.
  • Building contractors saw particularly sharp falls in the industrial and commercial sectors and the prospects going forward in these areas are also disappointing, with new orders in 2009 falling by 38% and 45% respectively.
  • Contractors also saw a continued fall in enquiries during Q1, although the fall in commercial orders (42%) was smaller than the 75% experienced in the final quarter of 2009.
  • Despite the falling workloads, more contractors reporting increasing costs and they attibuted this to rising material prices.

Sign up to our FREE email newsletters or subscribe to our RSS feed for regular updates on the latest construction news, construction tenders, construction data, and construction law.

Got a story? Email news@theconstructionindex.co.uk

MPU

Click here to view more construction news »