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Editorial

Watts Bulletin (Issue 124)

Welcome to the September issue of Watts Bulletin. Having welcomed encouraging construction figures during the first half of this year, the industry now faces gloomy prospects for the autumn and winter months. If the latest forecast from the Construction Products Association is to be believed, there is little good news in the pipeline and early hopes of recovery were over-optimistic. The latest RICS construction market survey confirms that chartered surveyors around the country are far from upbeat about their prospects for the next few months, with the majority expecting a further decline in workloads for the foreseeable future. There is always another side to every story and with public sector estates departments now focused firmly on streamlining their property portfolios, it is to be hoped that they will recognise the wisdom of following the advice of the head of the Government’s new property unit, and turn to the private sector for advice. This will not keep the construction sector in work but for those with expertise in strategic property solutions, it could provide much needed business in an ever more challenging market.

Watts Bulletin (Issue 124)

Boost economy and get construction working, says CPA

Michael Ankers, Chief Executive of the Construction Products Association (CPA) is calling on the Government to invest in essential infrastructure to give the economy a shot in the arm and get the construction industry back to work.

Industry predictions

Press reports earlier this month gave the latest projections from the CPA, which predict output will fall for the remainder of this year and will decline further during 2011. Latest figures on new orders for construction work show recovery in orders for private sector work go “nowhere near” what is needed to offset the anticipated 18% fall in public sector construction work over the next two years (source Building).

The construction industry showed a strong performance, with increased activity during the first six months of 2010. However, the CPA claims that these figures represent a false dawn for the industry, resulting from a combination of fiscal stimulus, the improved performance of the housing sector, and the start of a number of major projects in the run up to the election – rather than a genuine recovery.

Michael Ankers told Building, “Whilst we can see the prospects for a pick-up in output in 2012 and the following two years, this recovery is going to be slow and hold back a more rapid growth in the wider economy. Even by 2014, output in the industry will not even have recovered to the levels it experienced in 2003.”

He is now calling on Government to recognise that spending cuts and tax rises alone will not secure long-term economic growth and to invest in essential infrastructure.

The latest RICS Construction Market survey confirmed the CPA’s findings, revealing that sentiment in the sector began to decline again in the second quarter of the year, due to fears over the scale of public spending cuts and ongoing uncertainty about prospects for the economy. The latest data shows more surveyors reporting a fall than a rise in total construction workloads, in stark comparison to the previous quarter in which 5% more surveyors reported rising, rather than falling, workloads.
RICS chief economist, Simon Rubinsohn, believes spending cuts are already having an adverse effect on sentiment and although the cost of tradesmen and overheads continue to fall, raw material prices are rising – creating a difficult operating atmosphere.

For more information go to www.constructionproducts.org.uk

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