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Editorial

Watts Bulletin (issue 128)

Welcome to the May 2011 issue of the Watts Bulletin. This month we ask whether clients should be taking more responsibility for checking the works undertaken on their behalf. A recent report by Nick Bell in the Institute of Occupational Safety and Health Journal looks at this issue in detail.

On the following pages we also look at prospects for the construction and property industry in 2011; we report on the continuing campaign to introduce DECs for all non-domestic property; and we take a closer look at BRE Global’s new GreenBookLive, now with a fast new searchable database.

Watts Bulletin (issue 128)

Construction shows signs of recovery despite poor ONS figures

The latest Construction trade Survey, published by the Construction Products Association (CPA) in May, reveals that construction improved during the first quarter of the year.

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These findings are backed up by the latest Construction Market Survey from the RICS which indicates that rising workloads in the private, commercial and housing sectors led to an overall improvement in the construction market, despite public sector activity continuing to fall during the first three months of 2011.

Key findings from the CPA survey are as follows:

  • 56% of heavy side firms stated that heavy side sales volumes rose
  • 43% of contractors reported activity rising during  the first quarter of 2011 compared with the first quarter of 2010
  • 77% of heavy side firms and 88% of light side firms saw costs rising during the last 12 months
  • 71% of contractors reported that materials costs rose in the first quarter of 2011 compared to the first quarter of 2010.

According to the RICS, workloads improved during the last quarter, moving to a net balance of +6 from -5, boosted by the dramatic rise in activity seen by the private sector. A reported 17% more surveyors say workloads in commercial construction rose rather than fell, when compared to the last quarter of 2010.

Both surveys contradict the Office of National Statistics (ONS) Q1 output figures, released in April, which showed construction falling by 4% during the same period.

Commenting on the RICS survey, Simon Rubinsohn, the institution’s chief economist, said:

“The stronger reading for construction output workloads in the first quarter of 2011 compared with the final three months of 2010 contrast directly with recent ONS data - strengthening the case for an investigation into the quality of the official statistics. We are particularly encouraged by the indications that the private sector is not only seeing an increase in workloads but planning to raise employment”.

However, prospects for the year ahead are less optimistic “as the public sector retrenches and private sector sentiment remains weak,” said Noble Francis, economics director at the CPA. He pointed out that the apparently improving climate for construction was in comparison to the final quarter of 2010, which was badly affected by freezing weather conditions. “The industry’s near-term future is likely to be extremely challenging... with domestic demand remaining subdued, exacerbated by expectations of further rises in fuel, energy and materials costs,” he said.

Stephen Ratciffe, director of the UK Contractors Group also voiced his concern that the industry has not yet seen the full impact of the public sector cuts. “The government has stated that construction is at the heart of its growth strategy for the UK economy and as it accounts of around 10% of the UK’s economy it is vital that investment in essential schools, hospitals and housing is maintained...” he said.

Simon Rubinsohn’s view is that the industry is still likely to face significant challenges over the next twelve to eighteen months, “but our latest results do provide a chink of light that things are beginning to get better” he added.

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

Watts Pocket Handbook

The Watts Bulletin is the technical companion to the Watts Pocket Handbook, the essential guide to property and construction, as used by professionals since 1983.

Watts Bulletin editor: Trevor Rushton.

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