The Construction Product Association’s latest Construction Trade Survey, published today, shows that activity in construction rose for the tenth consecutive quarter in Q3. This growth was reported by firms across all areas of the industry, from building contractors and SME builders to civil engineers and product manufacturers.
Commenting on the survey, Dr Noble Francis, Economics Director, said, “Firms across the whole construction supply chain reported rises in output during Q3. Although activity appears to have slowed down, SMEs, civil engineering firms and product manufacturers remain optimistic about the near-term outlook. On the downside, building contractors reported an across-the-board decrease in new orders during the quarter, particularly in the public housing sector.
“A downturn in public housing work was expected, given the proposed changes to housing benefit, Right to Buy and social rent cuts in the July Budget. Of more concern is the fall in new orders in private housing and commercial, which have driven the construction recovery over the last two years.
“However, not all the news is discouraging. SMEs reported an increase in enquiries, civil engineers reported an increase in Q3 orders and product manufacturers anticipated workloads rising over the next 12 months. Increased headcount among construction firms also signals expectations of further growth in activity.
Dr Francis concluded, “Although the overall outlook is largely optimistic, the impact of a shortage of skilled labour continued to manifest itself, not just in difficulties recruiting bricklayers and other on-site trades, but in rising wage bills. In Q3, labour costs were higher for 75% of building contractors, 93% of product manufacturers and 44% of SMEs. Increasing activity over the next year threatens to make these labour supply issues even more acute.”
Richard Beresford, Chief Executive of the National Federation of Builders, said, “The construction industry’s broad-based recovery should not lull us into ignoring certain concerns. Government policy uncertainty on renewables, the cancelling of the Green Deal and the disposal of housing association stock will leave a vacuum in the repair and maintenance market. Difficulty in recruiting certain skills are driving up costs and the proposals on apprenticeship funding will only make it harder to invest in the very skills the industry needs.”
Key survey findings include:
- 4% of building contractors, on balance, reported that construction output rose in the third quarter of 2015 compared with a year ago. In Q1 and Q2, these balances were 50% and 17%, respectively
- On balance, 25% of SME contractors reported increased workloads in Q3 compared to three months earlier
- Public housing orders decreased in Q3 according to 42% of building contractors, on balance
- A balance of 12% reported a fall in orders in private housing while commercial orders were lower for a balance of 20%
- 22% of SMEs reported an increase in enquiries in Q3, on balance
- 13% of civil engineering firms reported an increase in new orders in Q3, on balance
- 63% of building contractors reported difficulties recruiting bricklayers, 41% for carpenters and 28% for plasterers in Q3
- 75% of contractors reported labour costs rose in Q3 compared with the previous quarter
ENDS
Note to Editors:
CONSTRUCTION PRODUCTS ASSOCIATION:
The Construction Products Association represents the UK’s manufacturers and distributors of construction products and materials. The sector directly provides jobs for 300,000 people across 20,000 companies and has an annual turnover of more than £47 billion. The Association acts as the leading voice to promote and campaign for this vital UK industry.
The CPA produces a range of economic reports including the quarterly Construction Industry Forecasts, Construction Trade Surveys and the State of Trade Surveys.
National Federation of Builders:
The National Federation of Builders (NFB) represents around 1,500 builders and contractors across England and Wales. In addition to providing specialist advice and business services, the federation, with a network of four regional offices, lobbies local, national and European government on a range of issues to sustain positive trading conditions for members. With origins dating back to 1876, today's NFB is a modern organisation providing the medium sized contractor and smaller builder with an unparalleled package of services.
CIVIL ENGINEERING CONTRACTORS ASSOCIATION:
The Civil Engineering Contractors Association (CECA) has over 300 member firms that carry more than 80% of all civil engineering work in Great Britain. The CECA survey of civil engineering workload trends, in which more than a third of the membership takes part, tests for changes over the past year in contractors’ workload, workforce, order books, cost trends, and tender prices. It also examines the supply situation for key resources, and contractors’ expectations of trends in new orders and employment in the coming 12 months.
FEDERATION OF MASTER BUILDERS:
The Federation of Master Builders (FMB) is the UK's largest trade association in the building industry, with nearly 10,000 small and medium-sized (SME) construction firms operating across England, Wales, Scotland and Northern Ireland. Established in 1941 to protect the interests of SME building firms, the FMB is independent and non-profit-making, lobbying for members’ interests at both national and local levels.
The FMB is a source of knowledge, professional advice and support for its members, providing a range of modern and relevant business building services to save them time and money. The FMB also offers advice to consumers via its “Find a Builder” service. Within its membership, around 38% of FMB members engage in house building either as their primary function or as part of the suite of building services they provide, but most are primarily active in the domestic RM&I market.
FOR FURTHER INFORMATION CONTACT:
Noble Francis, Economics Director
Construction Products Association
Tel: 020 7323 3770
Mobile: 0791 261 2882
E-mail:noble.francis@constructionproducts.org.uk
Jeff May, Marketing and Communications Manager
Construction Products Association
Mobile: 07904 476 166
E-mail: jeff.may@constructionproducts.org.uk
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