Activity rises for 11th consecutive quarter
The Construction Product Association has published its latest Construction Trade Survey, showing that activity in the construction industry is continuing to rise.
For the 11th consecutive quarter firms across all areas of the industry have reported growth. Private housing, commercial and infrastructure sectors have shown the greatest rises with new building activity.
Rebecca Larkin, Senior Economist at the CPA, commented on the survey: “It is encouraging that growth continues to be reported across the entire construction supply chain. Overall, the near-term outlook appears positive.”
While the growth is recognised, it can also be seen that Main Contractors order books are not as full as expected.
“Growth will continue to be led by work in the private housing, industrial and infrastructure sectors, but there are clearly areas that are languishing. Activity and orders were reported to be lower in public housing, which reflects the headwinds facing housing associations and local authorities amid recent policy decisions.” She continued.
The skills shortage also continues to be a blot on the report, with worries over finding skilled labour, such as bricklayers, carpenters and plasterers, leading to higher wages and concerns of delivery.Suzannah Nichol, Chief Executive of Build UK said: “Whilst we are continuing to see growth in construction the market is very mixed and the difficulties in recruiting the right skills are causing very real concerns as labour costs rise. With an expectation of rising workloads over the coming 12 months Build UK will focus on inspiring young people and those looking for a change of career to choose construction whilst motivating the workforce to stay within the industry.”
Paul Bogle, Head of Policy and Research at the National Federation of Builders, said: “While costs and the recruitment of skilled tradesmen remain an issue, we could be seeing the start of a trend as public housing output declines. It is highly unlikely the Government will realise its aspiration of building one million homes by 2020 without a strong house building public sector. Without more widespread access to small sites for SMEs the increases in private house building numbers can not be sustained over the longer term.”Key survey findings include:
- 23% of main building contractors, on balance, reported that construction output rose in the fourth quarter of 2015 compared with a year ago
- A balance of 31% of specialist contractors reported a rise in output during Q4
- On balance, 6% of SME contractors reported increased workloads in Q4 compared to three months earlier
- A balance of 25% of main contractors reported an increase in orders in private housing, whilst industrial orders were higher for a balance of 6%
- Public housing orders decreased in Q4 according to 55% of main contractors, on balance
- 6% of SMEs reported an increase in enquiries in Q4, on balance
- 21% of civil engineering firms reported an increase in new orders in Q4, on balance
- 60% of main contractors reported difficulties recruiting carpenters, 50% for plasterers and 47% for bricklayers in Q4
- 41% of main contractors reported labour costs rose in Q4 compared with the previous quarter