According to the latest Construction Trade Survey, published by the Construction Products Association (CPA) on 9 June, construction activity was up again in the first quarter of the year.
It is the first time in six years that the industry has seen four consecutive quarters of growth in activity. Companies across all areas of construction reported increased output including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.
The survey found that 57% of building contractors reported that, on balance, private new housing output rose during 2014 Q1 compared with 20% in 2013 Q4. In addition, 22% of building contractors reported that commercial offices and retail output rose during 2014 Q1 compared with 8% in 2013 Q4.
Meanwhile, 11% of firms reported that, on balance, housing repair and maintenance output fell during the first quarter of 2014.
However, the CPA says that cost rises are a key concern, with 77% of building contractors reporting an increase in costs during the first quarter this year compared with 63% in quarter four last year. Overall, 89% of firms reported rises in material costs in Q1, considerably higher than the 65% of firms reporting material cost rises in Q4 2013. In addition, 50% of firms reported rises in labour costs, higher than the 34% of firms reporting labour cost rises in Q1 and 7% at the start of the 2013.
CPA economics director, Dr Noble Francis, said: “Firms across construction reported rises in output during Q1 and increases in orders and enquiries clearly indicate that activity will continue to rise throughout 2014. Unsurprisingly, private new housing was the key driver of construction activity.”
He continued: “Currently, the key concerns are rising costs and skills availability in specific sectors such as private new housing. Overall, the industry reported that there weren’t serious problems recruiting construction trades.”
Paul Senior, national chair of the National Federation of Builders, said: “Rising workloads and increases in future orders are good news, but behind those figures are areas of concern. Higher labour costs and a lack of available skills are a ticking time bomb that needs to be defused urgently otherwise, for many SMEs, the premiums attached to the cost of simply building will become unsustainable.”