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Page 20 Contractors World - UK & Ireland Vol 1 No 6

What hope for the UK construction industry?

Roger Lindley, Editor reflects on the current situation and comments by industry associations.

Politicians still continue to pontifcate about investing in the infrastructure, in new house developments and other grandiose schemes to stimulate the industry, boost the economy and reduce the ever increasing levels of unemployment. However, as the Construction Products Association reports there is little to celebrate.

Of course, it is the season of politcal party conferences so we should be used to statements reminding us of how tough the economy is but how the party that is speaking has the solutons.

Am I alone in not understanding the situaton. If the Government (i.e. us) own as much as 85% of some of the banks, why are they saying that “ . . . the banks need to do more to make fnance available”? An 85% stake holding in any company is more than required to not ask for changes but insist on changes - or a change in the top management. But, then again, perhaps it is because, as we are frequently reminded, we are not ‘professional bankers’ and as such do not understand fnances.

Anyone with that idea should look at the latest Kier interim report (in this issue), which shows that the company is handling billions of pounds proftably - so much so that, even in these stricken tmes, they are increasing dividend - and they have schemes in hand into 2013. Instead of companies going to fnancial investors for advice, perhaps it is tme to turn it around?

Lower level of construction orders set alarm bells ringing

Orders for new constructon work fell dramatcally in the second quarter of the year and are now at a level not seen since 1980. Orders fell by over 16% compared with an already low fgure in quarter one and are over 23% down on the same quarter in 2010. It should be said that there are some that queston the statsitcis as not truly representatve of the state of the industry and, although it is facing difcult tmes, it may not be as bad as the latest fgures would indicate. Commentng on the fgures, Constructon Products Associaton 1 Chief Executve, Michael Ankers said, “This is an alarming set of fgures at a tme when the economy is already slowing and the construction industry is seen as having a major part to play in rebalancing the economy.

“Whilst the fall in public sector orders of 30% is no surprise given the cut back in public sector spending, it is partcularly alarming to see the fall in new orders for private sector constructon – down 8% on the frst quarter of the year and 10% down on the same quarter last year. Within this, new orders for private housing have fallen

again (down 8% on the frst three months of the year) and orders for commercial work are now back to where they were in the middle of 2009.

“Government has to take these fgures very seriously and whilst maintaining its commitment to addressing the country’s long term budget defcit it needs to fnd ways to bring forward some of the key infrastructure projects that will help stmulate economic growth.

“It also needs to contnue to keep pressure on the banks to make fnance available for house purchase and other investments. Finally, it should ensure its planning reforms are not blown of course by those whose agenda is not focused on ensuring a sustainable economic recovery in this country.”

Similar words were issue by The Civil Engineering Contractors Association 2 (CECA) which said that it also is extremely concerned by the fgures, as they demonstrate the stark impact of public spending cuts combined with a marked lack of confidence on the part of the private sector to invest in new construction. The importance of

“This is an alarming

set of figures at a time when the economy is already

slowing. . . .”

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