New orders fall at fastest rate for 24 years

Grant Prior 13 years ago

Shocking new construction orders figures released today by the Office for National Statistics created even more confusion about the real state of the industry.

Reuters said the official figures show the biggest fall in new orders since 1987 during the first quarter of the year with a 23% drop on the previous three months and an 18% decline on the same period last year.

The numbers were even worse in the civil engineering sector with infrastructure orders down a staggering 48%.

But the ONS data will again call into question the accuracy of the Government’s numbers after the latest construction purchasing managers survey yesterday painted a much healthier picture of the industry.

Civil Engineering Contractors Association director of external affairs Alasdair Reisner said: “The ONS figures show that the orders needed to drive growth are drying up, putting the industry at real risk of further decline.”

Simon Rubinsohn, RICS Chief Economist, said: “Official figures for new construction orders received during the first quarter of the year paint a disturbing picture for the outlook for the sector.

“The volumes of orders received was the lowest since the first quarter of 2009 and, though the public sector was responsible for much of the decline compared with the final three months of last year, the private sector also produced disappointing results.

“To some extent this can be blamed on the volatile nature of the sector; the three quarter rolling average of new orders has been broadly flat since the middle of 2010.

“But after the more upbeat tone to sentiment as reflected in the latest RICS survey of the sector, today’s numbers provide a timely warning that the backdrop for the construction industry remains challenging as public spending cuts bite, the private sector only recovering in some areas and development finance still restricted.”

Noble Francis, Economics Director of the Construction Products Association said: “The fall in orders for this quarter follows a 26 per cent increase from the previous quarter at the end of 2010.  These two figures show that quarter on quarter the situation is very volatile.

“To achieve a more accurate picture of the longer trend it is better to look at the orders over the last 12 months and compare these with the previous 12 months. Over this period orders were 7 per cent down with significant falls in the public housing, education and health and infrastructure sectors, only partially offset by rises in private housing, commercial offices and retail sectors.

“Looking at orders in the latest 12 months compared to the previous 12 months, public housing orders were 8 per cent lower, education and health orders were 18% lower and infrastructure orders were 32 per cent lower.

“This indicates the start of the public sector spending cuts that we had anticipated since the Comprehensive Spending Review and we would expect this fall in orders  to feed through into construction output from the second half of the year.

“On the plus side, private housing orders during the last 12 months were 45 per cent higher than during the previous 12 months. Commercial offices, retail and leisure orders were 6 per cent higher over the same period. Both of which indicate a continued recovery in private sector construction.

“However, the sharp nature of the public sector spending cuts appear as though they will outweigh private sector recovery in the short term and, as a consequence, we forecast that construction output will fall in 2011 and 2012, by 1 per cent and 2 per cent respectively, before private sector recovery starts to drive growth in the construction industry as a whole.”

Latest news

Lendlease puts construction arm up for sale

After two decades of global expansion Lendlease retreats to Australia
16 hours ago

Former Crossrail boss Mark Wild to lead HS2

Wild to bear down on spiralling costs and bring rejigged scheme in on time
1 day ago

Receivers in at £125m Manchester tower developer

Domis Construction walked away from scheme following doubts over funding
2 days ago

Costain A1 £260m dualling job finally gets go-ahead

Ministers sat on planning inspectors report for nearly three years
21 hours ago

Election delays decision on Lower Thames Crossing

Planning decision on £1.2bn Luton airport expansion also pushed back six months
21 hours ago

Caddick steps-in at former Lane End housing job

Contractor to restart phase of £262m scheme hit by administration
21 hours ago

Plans in for Leeds iconic Tetley building revamp

Former brewing giant's HQ to become indoor market and offices
21 hours ago

BAM wins first phase of North Devon hospital revamp

New staff accommodation to kick-off hospital redevelopment
21 hours ago

McAlpine pulls out of £55m Carlisle Citadels project

University of Cumbria starts hunt for replacement contractor
6 days ago

Strabag UK suffers further big trading loss

Austrian contractor is gearing up for major presence in the UK market
5 days ago

Durham Uni picks UPP for £130m student scheme

Firm will deliver 1,000 self-catered bed spaces
5 days ago

Architects now upbeat after 10-months of work gloom

Larger practices see rising workloads in next three months
5 days ago

Motorist dies after collision with road paver

Police Scotland investigating fatal crash
6 days ago

McLaren Living appoints HG Construction for £69m scheme

Build to Rent scheme will transform former vacant car park site in Leeds city centre
6 days ago

Squibb liquidator probes £2m of “missing” plant

Machinery, cars and scrap metal have disappeared at demolition specialist
6 days ago

Galliford Try to re-enter affordable homes market

Contractor sets out new five-year plan to build margin to 4%
6 days ago

Former Sellar chief to lead civils contractor Kilnbridge

Owen Dannatt joins as new CEO as founder Dermot McDermott becomes Chairman
6 days ago

Hunt starts for nuclear fusion plant construction partner

Fusion energy plant to be built at West Burton coal power station site.
6 days ago

National Grid raises £7bn for big infrastructure upgrade

Rights issue to fund a major round of capital investment in energy infrastructure
6 days ago

Grenfell police probe to last at least until end of 2025

19 companies and 58 individuals could eventually face charges
6 days ago

Mace confirmed on £100m London office retrofit

Work underway on Helical's 100 New Bridge Street job near Ludgate Circus
7 days ago

Wylfa chosen for next big nuclear power station build

Government names Anglesey site for a large-scale gigawatt nuclear power plant.
7 days ago

Bowmer & Kirkland trading profit halves

Contractor buys HVAC specialist Adcock despite challenging market
7 days ago

Piling specialist Van Elle plans further job cuts

Piling specialist plans further cost savings in face of lower demand
7 days ago

Civils contractor A Catlow files administration notice

High voltage cable specialist lodges court notice
7 days ago

Green light for ARC Oxford lab campus

Work to start later this year on £40m Ascent building job
7 days ago

Stonehenge tunnel hit by another legal delay

Court upholds latest appeal against £1.7bn scheme by campaigners
1 week ago

Plans go in for huge Olympic Park construction hub

Bow Goods Yard could deliver 3.5m tonnes of materials a year to sites across London
1 week ago

40% affordable homes target for Labour’s new towns

Labour pledges to select new town sites by end of first year
1 week ago

Plan for £100m Liverpool Baltic station

Construction work could begin next year
1 week ago

Contractor services