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Construction activity worsens in third quarter

Construction activity worsens in third quarter
Construction activity fell sharply again in the third quarter despite an upturn in the economy as a whole, according to the latest pan-industry trade survey.

The latest Construction Trade Survey industry is continuing to be hit by falling public sector housing starts, declining tender prices and worsening profit margins.

Forward looking indicators of orders and enquiries, were also negative, reinforcing concerns that the industry is unlikely to see growth until at least 2014.

One in four building contractors reported that, on balance, orders fell in the third quarter and half said that tender prices fell.

The latest trade survey published today also found:
  • 20% of heavy side product manufacturers and 41% of light side manufacturers reported that, on balance, sales fell in Q3
     
  • Public new housing and public non-housing were the worst hit sectors, with a balance of 38% and 34% of building firms respectively, reporting falls in output
     
  • 29% and 27% of building contractors reported that, on balance, output fell in the private industrial and private commercial sectors respectively
     
  • 17% of civil engineers reported a fall in workload
Noble Francis, Economics Director at the Construction Products Association said:  “While public sector construction activity has been falling for some time as a result of the government’s cuts, private sector activity is also now falling sharply.

 “On top of this bad news, infrastructure work declined in Q3, which is extremely concerning given the number of recent announcements from government aimed at stimulating infrastructure activity.

”Julia Evans, chief executive of the National Federation of Builders added: “These figures are a stark reminder that, while the rest of the economy is showing tentative signs of growth, the government should not take its eye off the ball with regards to construction.”

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