Growth figures mislead, say construction chiefs
PROSPECTS for construction through to Christmas look increasingly grimas product manufacturers report declining sales and contractors highlight falls in output, according to the construction trade survey for the
third quarter to September.
Manufacturers and contractors reveal significant fears for 2011 with confirmation of a 30% cut in capital expenditure in the government’s Comprehensive Spending Review.
This is despite figures from ONS indicating construction industry growth in the third quarter of 2010.
Noble Francis, economics director at the Construction Products Association, says: ‘The environment for contractors and product manufacturers is still extremely challenging, especially given that the public sector
accounts for more than one third of total construction output.
‘Cuts announced in the CSR will inevitably have major consequences for the industry over the next two
years.
‘Of great concern, in the light of the CSR, is 67% of contractors, on balance, reporting that order books
fell in the third quarter in public non-housing, which covers education and health construction.’
Stephen Ratcliffe, director of the major contractors group UKCG, says: ‘This survey paints a picture quite different from the official growth figures which suggest – wrongly in our opinion – that construction is the engine driver of economic recovery.
‘The new government has made a good start in setting out its public sector investment plans but the whole picture has not yet been filled in – for example the energy white paper is not due out until Easter next year – and there are real concerns that the decentralisation of decision making will slowup both the planning and procurement of new public sector investment projects.’
Julia Evans, chief executive of the National Federation of Builders added: ‘Despite official figures showing impressive industry growth, the industry’s own figures point to a fall in output, falling prices and fewer enquiries. ‘This all points to a depressing Christmas for the industry.’
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