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Editorial

Watts Bulletin (issue 125)

Welcome to the November issue of Watts Bulletin. The dust has settled after last month’s Comprehensive Spending Review and the industry is coming to terms with the enormity of the Coalition Government’s cuts in public sector expenditure. Local and central Government now have the complex task of turning reductions in public spending into reality and providing a lot less work on capital projects for the private sector. However, Government departments and local authorities are unlikely to achieve the cuts that are needed without help and advice from the property industry. As Jo Stocks, Watts CEO commented in Property Week earlier this month, “…local authorities must now find imaginative ways to reduce overheads; all will have implications for property. This could open up a previously untapped market for property companies to provide expert advice, to generate efficiency savings and give the public sector a clear strategy for the future”. The challenge now will be to turn a difficult situation into an opportunity – for both the public and private sectors.

Watts Bulletin (issue 125)

Construction growth proves illusive as figures slow

Despite strong growth in construction output from July to September, latest figures from the Chartered Institute of Purchasing and Supply (CIPS) reveal that this activity has not been sustained.

Construction growth_main image

Construction output increased by 4% in the third quarter of 2010 according to figures from the Office for National Statistics released in October. The quarterly rise followed a 9.5% increase in output in the second quarter, which represented a total contribution to GDP of 0.6%. However, latest figures from CIPS tell a different story with new orders and activity slowing. Employment levels also continued to fall as October’s cuts in public spending took their toll on confidence in the sector.

Commenting on the results from the Markit/CIPS Purchasing Managers’ Index for October, David Noble, CIPS CEO said: “The recent growth in the construction sector seems to be petering out. Further declines look inevitable as nervy customers and a spendthrift public sector put firms in a precarious position. Construction will have to look much harder for new contracts going forward, so it’s no surprise that many are cutting jobs and reducing purchasing activity to provide a safety net against further falls”.

David Noble described the data as “nerve-racking” in light of the contribution made by construction to GDP growth last quarter. “Commercial activity may have fared less badly than in the underperforming housing market, but overall expectations of future business remain historically low. The high hopes of earlier in the year seem to have given way to dire predictions on what the future may hold,” he said. 

For more information or for a copy of the latest report go to www.cips.org

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