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Construction Trade Survey results for 4Q12

World Cement,

The UK’s Construction Products Association (CPA) has published the Construction Trade Survey for 4Q12. Although larger companies working in infrastructure have experienced some improvement during the quarter, overall, the construction sector continues to feel the effects of higher input prices and weak demand. The survey found that 62% of contractors experienced declining orders in 4Q12, although the workload for civil engineers remained flat, a better result than in 3Q12 when workloads fell by 17%. Although 46% of light side manufacturers saw sales rise during the final quarter of the year, 13% of heavy side manufacturers reported that sales decreased on balance. On a sector basis, 34%, 30% and 23% of building contractors involved in private industrial work, non-housing R&M and the private commercial sector, respectively, reported that output declined. Output for new private housing projects flatlined. Around 30% of building contractors saw costs increase, however, this is a slight improvement on the 32% reported in the previous quarter.

“It was good to see a rise in construction output for Q4 compared to Q3, when activity was adversely affected due to the Olympics and Paralympics. However, output remains 9.3% lower than a year ago and this is reflected in the Construction Trade Survey. A minority of firms working on energy and rail projects continues to thrive, as do construction product manufacturers who are able to export outside the EU. Yet, overall, the industry continues to suffer falls in work across both public and private sectors. Furthermore, outside of infrastructure, the industry is expecting that 2013 will be even more difficult, with declining orders and enquiries across the industry”, said Noble Francis, CPA Economics Director.

Julia Evans, Chief Executive of the National Federation of Builders, was similarly wary about construction activity in 2013, stating: “The construction industry is braced for a year in which weak demand and higher costs will create a very challenging trading environment. As the government and industry collaborate to lay out a long-term strategy for the industry, we must not lose sight of the need to maintain the current capital investment plans that will generate economic growth in the more immediate future”.

Adapted from press release by Louise Fordham.

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