The Construction Product Association’s latest Construction Trade Survey, published today, shows that activity in construction rose for the eleventh consecutive quarter in Q4. This growth was reported by firms across all areas of the industry, and was led by new building activity in the private housing, commercial and infrastructure sectors.
Commenting on the survey, Rebecca Larkin, Senior Economist at the CPA, said, “It is encouraging that growth continues to be reported across the entire construction supply chain. Overall, the near-term outlook appears positive, as firms from construction product manufacturers at the beginning of the supply chain to specialist contractors, SME builders and civil engineers carrying out work on the ground reported modest increases in enquiries, orders or anticipated sales for Q1 and the 12 months ahead. Main contractors’ order books suggest some weakness in Q1, however.
“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. Orders were also reported to be lower for repair and maintenance (R&M), both housing and non-housing, in Q4.
“A shortage of skilled on-site labour remains the largest threat to construction activity over the coming months, however. Half of main contractors found it difficult to recruit bricklayers, carpenters and plasterers in Q4, which continues to exert upward pressure on wage bills and raises the concern of whether expected volumes of work can be delivered.”
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
ENDS
NOTE TO EDITORS:
The Construction Products Association represents the UK’s manufacturers and distributors of construction products and materials. The sector directly provides jobs for 313,000 people across 21,000 companies and has an annual turnover of more than £50 billion. The Association acts as the leading voice to promote and campaign for this vital UK industry.
The State of Trade Survey is one of a range of economic publications produced regularly by the Association, including the Construction Trade Survey and the Construction Industry Forecasts.
FOR FURTHER INFORMATION CONTACT:
Rebecca Larkin
Senior Economist
Construction Products Association
Tel: 020 7323 3770
E-mail: rebecca.larkin@constructionproducts.org.uk
Jeff May
Marketing and Communications Manager
Construction Products Association
Tel: 07904 476 166
E-mail: jeff.may@constructionproducts.org.uk
Follow the Construction Products Association on Twitter: https://twitter.com/CPA_Tweets