Orders drop casts doubt on private sector led recovery

Grant Prior 14 years ago

Construction order figures continued their rollercoaster ride today as official Government statistics highlighted a worrying dip in new work during the second quarter.

New construction orders fell 14% compared to the first three months and 9% on the same period last year.

The figures contain worrying data for hopes of a private-sector led recovery with private housing tumbling by 24% compared to the previous quarter and commercial work down 7%

The only bright spot was private industrial orders which rose by 13% compared to last year.

Private and public infrastructure work suffered a grim quarter with a 22% fall.

One contractor told the Enquirer: “The numbers seem to be swinging all over the place but this latest set are very worrying.

“Money was still being thrown around by the Government during the first half of the year and it’s no surprise to see that diving.

“The real worry is that private work, and housing in particular, is also dropping.

“The hope was that private work would take up the slack of reduced public spending but these figures indicate that isn’t happening”

Julia Evans, Chief Executive of the National Federation of Builders said: “The importance of investment is clearly demonstrated by the fact that the only part of the sector to show a rise in orders was private industrial.

“But it is clear that private orders are not going to be enough to offset the losses facing the industry in the public sector arena.

“The government needs to do two things:  it needs to look at value, rather than just the sticker price, when finalising the comprehensive spending review.

“It also needs to take radical action to create the conditions that will help private investment to increase. For example it should reduce regulatory burdens and costs that would enable private investment to replace public funding of new homes.

“When there is investment in construction, both public and private, the rest of the economy benefits as seen in the contribution made by the industry to the growth in GDP in quarter 2.”

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