CPA sees third consecutive quarter of construction growth

The Constriuction Products Association’s latest Trade Survey, published today (9 February), shows three consecutive quarters of construction industry growth for the the first time in over five years.
Firms across all areas reported increased output, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.

Dr Noble Francis, economics director at the Construction Products Association, said: “The recovery, which started in 2013 Q2, continued, though risks remain. The rises in activity were slower than in previous quarters, and orders for new work similarly decelerated, potentially highlighting uncertainty amongst contractors as to whether the recovery would be sustained.

“Growth was driven by the housing sector, though this was partially offset by a drop in repair and maintenance work. Building contractors, SMEs and civil engineers reported rises in output, although Q4 levels were not as strong as Q3. Indeed, only product manufacturers saw activity levels higher in Q4 than Q3.”

“In addition,” he said, “41% of building contractors reported difficulties recruiting bricklayers and 32% reported difficulties recruiting carpenters.”

Julia Evans, Chief Executive of the National Federation of Builders added: “These figures highlight the fragility of the construction industry’s recovery, which is being driven by house building.

“Ongoing investment and future prospects point to further growth for the construction industry as a whole but as the economy recovers, it is important for companies to be at least as vigilant about costs, cash flow and late payment as they were during the downturn.”

Key survey findings include:

  • Private and public new housing were the key drivers with balances of 20% and 32%, respectively.

  • 15% of building contractors saw activity rise in Q4, though this dropped from 43% in the previous quarter.

  • Building contractors reported activity drops of 13% and 15%, respectively, in housing repair and maintenance and non-housing repair and maintenance.

  • A rise in exports over the next 12 months is expected by both heavy side manufacturers (45% on balance) and light side manufacturers (58% on balance).

  • 34% of building contractors, on balance, reported increased labour costs.

  • 41% reported difficulties recruiting bricklayers and 32% reported difficulties recruiting carpenters.

  • 76% of specialist contractors reported receiving payments between 30-60 days in Q4; late payment ranks as the most important factor affecting their business.
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