Construction activity has increased for the 12th consecutive quarter, according to new research – but many contractors are uncertain about the outlook.
The Construction Product Association’s (CPA) latest Construction Trade Survey, published today, shows that construction activity increased across the supply chain in the first quarter of 2016. Respondents include main contractors, specialist contractors, SME builders, civil engineers and product manufacturers.
Rebecca Larkin, senior economist at the CPA, said: “After a slowdown at the end of last year, firms throughout the construction industry experienced a stronger opening quarter in 2016. In spite of this, the clear theme for Q2 is uncertainty, with main contractors reporting lower orders in all sectors.”
Key survey findings include:
- 19% of main building contractors, on balance, reported that construction output rose in the first quarter of 2016 compared with a year ago.
- A balance of 13% of main contractors reported a decrease in orders in private housing and 42% reported a decrease in public new housing orders.
- 50% of main contractors reported difficulties recruiting carpenters, 40% for bricklayers and 36% for plasterers in Q1.
- Overall costs increased for 74% of civil engineers contractors, whilst 42% of main contractors reported labour costs rose in Q1 compared with the previous quarter.
- 100% of heavy side product manufacturers reported that wages and salaries increased from a year earlier.
Suzannah Nichol, chief executive of Build UK, said: “Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels.”
Richard Beresford, chief executive of the National Federation of Builders, said: “Uncertainty over the nation’s defining issue – housing – is reflected in slowing industry performance. While homes will continue to be built, as long as there is uncertainty over government policy, we will not be able to provide anywhere near the number of homes people need.”
