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Continued woes for UK construction industry

World Cement,

The Construction Trade Survey has revealed a decline in construction activity in the UK in 3Q12. Although other areas of the country’s economy have begun to show signs of recovery, the construction industry continues to suffer. The survey found that sales fell for heavy side product manufacturers and light side manufacturers by 20% and 41%, respectively, during the quarter. Building contractors found that output dropped by 27% in the private commercial sector and 29% in the private industrial sector. Building contractors also reported that public new housing and public non-housing output declined, decreasing by 38% and 34%, respectively. The Construction Products Association (CPA) has expressed concern about future growth, predicting that this is unlikely to occur until 2014.

“Conditions throughout construction continued to worsen in 3Q, as for the first time we experienced a decline in all construction sectors. Whilst the 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 3Q, which is extremely concerning given the number of recent announcements from government aimed at stimulating infrastructure activity,” said Noble Francis, CPA Economics Director.

Industry figures have urged the government to take further steps to boost the construction sector, following the introduction of programmes such as the UK Guarantees Scheme, as well as moves to enhance the planning and funding process. Julia Evans, Chief Executive of the National Federation of Builders, has called for the government to ensure that small and medium-sized businesses have access to funding.

Warnings about the construction industry’s growth prospects are accompanied by a survey from the University of Hull’s Department of Geography, Environment and Earth Sciences, which found that sustainability initiatives were lacking the support necessary within the sector. The research found the following problems:

  • A tendency for government policy to favour large businesses in the construction sector over small to medium-sized enterprises.
  • Wide variation in the application of planning rules across different local authority areas that stifle innovation in sustainable building.
  • Risk averseness by banks unwilling to invest in green businesses.
  • A shortage of skilled labour capable of using sustainable building materials coupled with a lack of knowledge to incorporate new green technologies into buildings.

Researchers working on the survey hope that the government will take these issues into account when creating policies that impact upon green construction in the UK.

Adapted from press releases by Louise Fordham.

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