Slump in infrastructure knocks new orders by 10%

Aaron Morby 9 years ago
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Construction new orders for the first quarter of 2013 fell 10% compared to the previous three months, tripped by a big fall in infrastructure.

The latest official new order figures showed a marked rise in private housing, but this was far overshadowed by slumping infrastructure orders, chopped in half or £1.6bn in cash terms.

Alasdair Reisner, director of external affairs for the Civil Engineering Contractors Association, said: “It is important to exercise caution when dealing with a single set of figures, and it should be noted that these statistics do not necessarily reflect recent results of CECA’s own Workload Trends survey.

“Nonetheless, the sharp decline in new orders in infrastructure should create a degree of caution.

“It is particularly worrying that it appears that workloads have fallen across all elements of infrastructure, including in the rail sector, which has prospered recently.

“Traditionally the first quarter has also tended to provide relatively strong orders in our sector, so today’s poor figures come as somewhat of a surprise.

“It is vital that all efforts are made to ensure that today’s numbers represent an anomaly, and that the sector returns to growth in orders as soon as possible, supporting employment in our sector and improvements in the wider economy.”

Dr Noble Francis, Economics Director at the Construction Products Association said: “Recent GDP figures have pointed to signs of growth in the overall economy, but construction has continued to face very challenging conditions with output already 7% lower than a year ago.

“Today’s new orders figures reflect these continuing difficulties.”

He said: “Most encouraging were indications of growth in the private housing market.

“Government policies – particularly FirstBuy, Funding for Lending and the recently announced Help to Buy – are giving major house builders the confidence to build.

“Because private housing has a short time-lag between orders and output, these new orders should lead to a further rise in housing activity this year.

But he warned that it remained of greater concern that there had been a 50% drop in the infrastructure sector since the previous quarter and the 39% fall compared to Q1 last year.

This is against a backdrop of regular and enthusiastic pronouncements from Government over the last two years, such as the Chancellor’s £5bn capital investment ‘boost’ in last year’s Autumn Statement, £20bn in new private investment in infrastructure and a further £5.5bn capital investment ‘boost’ in December.

He said: “The government must do better at translating such infrastructure announcements into new orders and real activity on the ground.

“Those aimed at housing are clearly delivering a beneficial effect; infrastructure must match this if we are to have a sustained economic recovery.”

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