Activity in the
construction supply chain significantly picked up in the second quarter of 2018
as the industry began its catch-up of work lost due to delays related to
Carillion and severe weather conditions in Q1, according to a survey of product
manufacturers, contractors, civil engineers and SME builders by the
Construction Products Association.
The Construction
Products Association’s Construction Trade Survey for 2018 Q2 shows that during
the quarter, 20% of heavy side product manufacturers and 6% of civil
engineering firms returned to growth, whilst the proportion of firms reporting
an increase in Q2 activity rose for main contractors, light side product
manufacturers and SME builders.
New orders data
signal that the catch-up will continue in the coming quarters, driven by
private housing, public housing and infrastructure, three sectors that account
for £60 billion of output annually.
Commenting on the
survey, Rebecca Larkin, Senior Economist at the CPA, said: “Order books at the
start of the year had suggested there was scope for catching up with some of
the work lost in the opening three months and the survey confirms the industry
made a tentative start in Q2.
"However, new
growth will be skewed towards housing and infrastructure – both privately and
publicly funded – which remain dependent on programmes of government support
and investor confidence in an environment of increasing economic uncertainty.”
Brian Berry, Chief
Executive of the Federation of Master Builders (FMB), said the research shows
that firms enjoyed stronger growth in workloads than they did in the first
three months of this year.
"Pleasingly,
the construction SME sector has now enjoyed more than five years of consecutive
growth," he added.
"Furthermore,
employment rose at a faster pace in the second three months of 2018 than it did
in the first three months. Looking ahead, despite growing political uncertainty
and Brexit now less than a year away, construction SMEs remain positive.
"Businesses are
optimistic with nearly half of firms predicting rising activity levels over the
next three months.”
Key survey findings
include:
- On balance, 15% of main
building contractors reported that construction output rose in the second
quarter of 2018 compared with a year ago
- 6% of civil engineers, on
balance, reported a decrease in workloads during Q2
- On balance, 23% of SME
contractors reported increased workloads in Q2 compared to three months
earlier
- Main contractors reported
that order books were higher in private new housing, public new housing,
private industrial and R&M sectors
- 11% of civil engineering
firms reported an increase in new orders in Q2, on balance
- 27% of SMEs and 33% of
specialist contractors reported an increase in enquiries in Q2, on balance
- Overall costs increased for
75% of civil engineering contractors, 60% of specialist contractors and
73% of heavy side product manufacturers
- 42% of main contractors
reported a rise in tender prices in Q2.
