Contractors braced for grim six months

Grant Prior 12 years ago
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Contractors are bracing themselves for a bleak second half of 2010 as orders continue  to fall and public sector cuts start to bite.

The latest Construction Trade Survey showed building and civils contractors experienced falls in output in both the first and second quarter of 2010.

The industry has now suffered falling output for the past nine consecutive quarters.

Contractors’ leaders are vowing to keep up the pressure on government to protect capital spending to support the construction industry.

Stephen Ratcliffe, Director UK Contractors Group, said: “ Whilst there are signs of some activity in the private sector, the survey highlights very real worries about  public sector investment.

“The recent postponement of the Building Schools for the Future programme has added to the lack of confidence about public sector work.

“There is a clear message for government here as it undertakes  its  comprehensive spending review.

“We will be pressing politicians very hard over the summer to ensure that there is clarity about the future programme when the CSR is announced.”

Noble Francis, Economics Director at the Construction Products Association said:  “Over the next few years, construction is braced for a fall in public sector investment and will increasingly need to look to the private sector for growth.

“It is critical that capital investment is focused on those areas such transport, energy, and other key infrastructure projects, that will do most to stimulate the wider economic recovery.”

Key survey findings are:

  • 50% of contractors stated that workloads fell on education and health in 2010 Q2
  • 57% of contractors reported falling orders in the industrial sector during the second quarter
  • 47% of light side manufacturers reported rising raw materials costs in 2010 Q2
  • 45% of heavy side manufacturers reported that fuel/energy costs rose
  • 53% of contractors reported that tender prices fell during the second quarter of 2010
  • 56% of contractors reported a fall in margins in 2010 Q2

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