The Construction Product Association’s latest Construction Trade Survey, published today, shows that construction activity increased across the supply chain in Q1. This was the twelfth consecutive rise reported by construction product manufacturers representing the beginning of the supply chain, through to main contractors, specialist contractors, SME builders and civil engineers carrying out work on the ground.
Commenting on the survey, 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 as projects are paused or postponed ahead of the EU referendum in June.
“Beyond that, firms continued to indicate that a shortage of skilled workers is the largest threat to construction activity over the rest of the year. Main contractors reported difficulties in recruiting bricklayers, carpenters and plasterers in Q1, whilst low availability of labour was also reflected in upward pressure on wage bills among product manufacturers and civil engineers.”
Suzannah Nichol, Chief Executive of Build UK said, “There continue to be mixed messages in terms of growth; however, industry intelligence shows increasing levels of activity over the last quarter. 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. Build UK is leading the way on the war for talent with its members opening their projects up to the public during Open Doors week in June to attract the brightest talent to projects at a both local and national level.”
Richard Beresford, Chief Executive of the National Federation of Builders, said, “Uncertainty over the outcome of the EU referendum and 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.”
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 38% of specialist contractors reported a rise in output during Q1
- On balance, 13% of SME contractors reported increased workloads in Q1 compared to three months earlier
- 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
- 25% of SMEs and 21% of specialist contractors reported an increase in enquiries in Q1, on balance
- 13% of civil engineering firms reported an increase in new orders in Q1, on balance
- 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
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NOTE TO EDITORS:
- The Construction Products Association represents the UK’s manufacturers and distributors of construction products and materials. The sector directly provides jobs for 313,000 people across 21,000 companies and has an annual turnover of more than £50 billion. The Association is the leading voice to promote and campaign for this vital UK industry. The CPA produces a range of economic reports including the quarterly Construction Industry Forecasts, Construction Trade Surveys and the State of Trade Surveys.
- Build UK provides a strong collective voice for the contracting supply chain in construction. Build UK brings together 27 of the industry’s largest main contractors and 40 leading trade associations representing over 11,500 specialist contractors. Build UK was created as a result of a merger between the National Specialist Contractors’ Council (NSCC) and UK Contractors Group (UKCG) in 2015.
- The National Federation of Builders (NFB) represents around 1,500 builders and contractors across England and Wales. In addition to providing specialist advice and business services, the federation, with a network of four regional offices, lobbies local, national and European government on a range of issues to sustain positive trading conditions for members. With origins dating back to 1876, today's NFB is a modern organisation providing the medium sized contractor and smaller builder with an unparalleled package of services.
- The Civil Engineering Contractors Association (CECA) has over 300 member firms that carry more than 80% of all civil engineering work in Great Britain. The CECA survey of civil engineering workload trends, in which more than a third of the membership takes part, tests for changes over the past year in contractors’ workload, workforce, order books, cost trends, and tender prices. It also examines the supply situation for key resources, and contractors’ expectations of trends in new orders and employment in the coming 12 months.
- The Federation of Master Builders (FMB) is the UK's largest trade association in the building industry, with nearly 10,000 small and medium-sized (SME) construction firms operating across England, Wales, Scotland and Northern Ireland. Established in 1941 to protect the interests of SME building firms, the FMB is independent and non-profit-making, lobbying for members’ interests at both national and local levels.
The FMB is a source of knowledge, professional advice and support for its members, providing a range of modern and relevant business building services to save them time and money. The FMB also offers advice to consumers via its “Find a Builder” service. Within its membership, around 38% of FMB members engage in house building either as their primary function or as part of the suite of building services they provide, but most are primarily active in the domestic RM&I market.
FOR FURTHER INFORMATION CONTACT:
Rebecca Larkin
Senior Economist
Construction Products Association
Tel: 020 7323 3770
E-mail: rebecca.larkin@constructionproducts.org.uk
Jeff May
Marketing and Communications Manager
Construction Products Association
Tel: 07904 476 166
E-mail: jeff.may@constructionproducts.org.uk
Follow the Construction Products Association on Twitter: https://twitter.com/CPA_Tweets
The Construction Product Association’s latest State of Trade Survey reports a positive performance in sales of construction products in the first quarter of 2016. Sales increased for a twelfth consecutive quarter, but manufacturers’ optimism is showing signs of sliding due to uncertainty surrounding the EU referendum in June.
Key points include:
- A balance of 31% of heavy side firms and 13% of light side firms reported that sales rose during the first quarter of 2016, compared to respective balances of 5% and 38% in the fourth quarter of 2015
- 38% of heavy side firms and 13% of light side firms reported an annual increase in sales
- Exports increased for 14% of heavy side firms and 50% of light side firms compared to a year earlier
- 38% of heavy side product manufacturers and 29% of light side product manufacturers reported that they anticipate a rise in total sales over the next quarter and next 12 months
- 71% of heavy side firms and 60% of light side firms anticipate a rise in exports during the next year
- Annual cost increases were reported by 35% of heavy side firms and 14% of light side firms
- Manufacturers reported that wages and salaries were reported higher by all heavy side firms and 71% of light side firms
Rebecca Larkin, CPA Senior Economist, said: “It is encouraging that after a couple of quarters of muted activity, heavy side manufacturers reported stronger sales growth in Q1. Light side manufacturers opened 2016 a little weaker, but this is likely to be a hangover as the slowdown reported by the heavy side at the end of last year filters through to light side activity – typically towards the end of the building process.
“Compared to the fourth quarter of 2015, a balance of 31% of heavy side firms reported a rise in sales in Q1. This increased from 13% in Q3 and 5% in Q4. On the light side, 13% of firms reported a rise in Q1 quarterly sales, down from 38% in Q4.
“Manufacturers’ optimism for Q2 and for the next 12 months has been dented by uncertainty in the run-up to the EU referendum in June. On balance, 38% of heavy side firms and 29% of those on the light side anticipate a rise in sales in Q2. These balances mark the lowest sentiment in three years and signpost a slowdown in growth as we approach the vote.
“One favourable side effect of the referendum uncertainty has been the depreciation in Sterling, which has resulted in increased exports for product manufacturers. On the heavy side, 71% of manufacturers anticipate an increase in export sales over the year, a view shared by 60% of light side firms. This will provide a welcome fillip if domestic demand pauses as manufacturers expect.”
ENDS
NOTE TO EDITORS:
The Construction Products Association represents the UK’s manufacturers and distributors of construction products and materials. The sector directly provides jobs for 313,000 people across 21,000 companies and has an annual turnover of more than £50 billion. The CPA is the leading voice to promote and campaign for this vital UK industry.
The State of Trade Survey is one of a range of economic publications produced regularly by the Association, including the Construction Trade Survey and the Construction Industry Forecasts.
FOR FURTHER INFORMATION CONTACT:
Rebecca Larkin
Senior Economist
Construction Products Association
Tel: 020 7323 3770
E-mail: rebecca.larkin@constructionproducts.org.uk
Jeff May
Marketing and Communications Manager
Construction Products Association
Tel: 07904 476 166
E-mail: jeff.may@constructionproducts.org.uk
Follow the Construction Products Association on Twitter: https://twitter.com/CPA_Tweets