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Survey shows second quarter upturn for construction sector

Conditions in the construction industry improved across all sectors during the second quarter of this year and throughout the supply chain, according to the Construction Products Association.
The latest CPA Construction Trade Survey reveals that even small and medium-sized businesses, which were hardest hit by the downturn, have reported their first rise in activity since 2007.

Private housing was one of the key contributors to the improving workloads, together with a 'catch-up' across many sectors following a poor first three months of 2013, when poor weather conditions significantly affected output.

The CPA says that industry prospects are also showing signs of improvement, with manufacturers, specialists, civil engineers, and SME contractors all reporting more orders for future work.

According to the survey, 72% of building contractors reported a rise in building work on an annual basis, on balance, compared to flat output in Q1. Meanwhile, 42% of contractors working on private housing developments and 40% of contractors working on public housing developments, reported an increase in output year-on-year, on balance.

Noble Francis, economics director at the CPA, said: 'Construction growth in Q2 is encouraging. As house building - boosted by Help to Buy until 2016 - is a key driver, this growth should be sustained. We must recognise, however, that this growth builds on Q1's historically low level when output was its worst since 2001.'

He continued: 'Forecasts from the Association anticipate that construction output will rise 2.2% in 2014 and a further 4.5% in 2015, driven by both private housing and infrastructure. To ensure growth in infrastructure, it is essential that all the announcements we have heard over the past three years actually turn into activity on the ground. This has not happened so far, as infrastructure output fell 13% last year.'

Stephen Ratcliffe, director UKCG (UK Contractors Group), said: 'The improvement in construction activity is encouraging, though any improvement should be set against the difficult conditions of the last few years. The survey shows increased workloads for contractors in the second quarter, but the majority still report falling order books.

'Bringing forward public sector investment in construction projects will help sustain any recovery. The government has recognised the importance of the construction sector, and the industry will continue to work with ministers to develop a clearer pipeline of work in order to build further industry confidence,' he added.

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12 August 2013


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