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UK construction orders down but potential boost on the horizon

World Cement,

The ONS has released figures for new construction orders in the UK in 3Q12. There has been some improvement, with the number of construction orders increasing by 5.4% from 2Q12. However, the volume of orders fell by 6.7% y/y and was the third lowest on record.

“Our intelligence of the trading conditions the industry is experiencing, has indicated a difficult market and these figures from ONS certainly endorse this position. However, there are some brighter areas, as both infrastructure and private industrial construction new orders are showing double digit increases of 46% and 24% respectively for the first nine months of this year, compared to the same period last year,” said Senior Economist at the Construction Products Association, Milja Keijonen. “It would be very encouraging if this percentage growth was repeated across all sectors, but the figures for these two sectors are not unexpected and the overall figure of orders for all new work is negative.”

Meanwhile, the Mineral Products Association (MPA) has welcomed the UK Government’s Autumn Statement, which includes additional local infrastructure investment and an extra £1.4 billion of spending for roads on both a local and national scale in 2013. The MPA believes that the Statement will have a positive impact on the construction and mineral product industries overall, if the measures can be delivered in the short-term.

Commenting on the announcement, Chief Executive of the MPA Nigel Jackson stated: “The Autumn Statement is a positive response to industry calls for more investment as well as cancellation of the planned January fuel duty increase and further action on unnecessary regulatory costs and burdens. The construction boost is modest when compared with the industry decline suffered during 2012, but it a step in the right direction. We also welcome the raising of the threshold on capital allowances. We do, however, remain concerned at the slow progress being made in getting new privately funded infrastructure projects underway.  A real focus on early delivery is required here. We hope that the proposed changes to the PFI model make a difference and soon. The Government has listened and has tried to shift things in the right direction but the focus has to be about urgent delivery particularly on housing, new energy and transport infrastructure and road maintenance.”

Adapted from press releases by Louise Fordham.

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