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Contractors World UK & Ireland
2012 Vol 2 No 4   
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Construction News - Economics - Business - Regulations

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Construction downward
trend continues

Latest figures from ONS for GDP in the first quarter of 2012 show that the UK economy and construction industry returned to recession with a fall of 0.2% fall and 3% respectively.

Commenting on these figures, Noble Francis, Construction Products Association Economics Director said, ‘“Given the sharp effects of public sector spending cuts over the past 12 months it is unsurprising to see that construction returned to recession in the first quarter with a fall of 3% following the 0.2% fall in Q4.

Furthermore, with new orders for construction falling 14% in 2011, the industry is likely to endure further falls near-term. Our latest forecasts for construction anticipate that the industry will fall considerably this year and remain flat in 2013, severely delaying recovery for the economy as a whole.”

“Given that independent economic analysis has shown clearly that for every £ spent in construction, £2.84 is generated for the wider economy, it is essential that government does its utmost to switch its current spending towards the more productive capital spending.”

No Construction Growth before 2014 as Spending Cuts Bite

Construction output is forecast to fall by almost 3% this year, according to the latest forecasts published by the Construction Products Association, as the cuts to the capital budget announced in the CSR start to have a real impact on industry activity. Construction output is forecast to remain flat in 2013 before private sector work strengthens and drives a return to growth in 2014.

Commenting on these forecasts, Michael Ankers, the Chief Executive of the Construction Products Association, said, “It seems inevitable that construction output fell in the first three months of this year and this will have had a significant impact on the rate of GDP growth at this time.

With new orders for construction falling significantly at the end of last year, 2012 is going to be a difficult year for the construction industry with output forecast to fall by almost 3%. The construction industry accounts for nearly 9% of GDP and therefore is going to be a major constraint on growth in the wider economy over the year ahead.

“Public sector spending cuts are now beginning to bite and with the exception of a steady recovery in the private housing market, where starts are forecast to increase by 5% this year and 11% next, the private sector is pretty subdued. What is particularly disappointing is the weakness of the private commercial market where output is expected to decline both this year and in 2013. Office development is slowing down and private finance for social infrastructure is unlikely to make a rapid comeback.

“One bright spot in the forecasts is investment in infrastructure, particularly rail and energy where growth is expected to increase in each year from now until 2016.

“The construction industry faces a difficult 18 months with a significant recovery not now expected until the second half of 2013.”
[cwmags]

 

rule

Commitment to

Commitment to
Long-Term Future of
UK Energy is Welcome

The Civil Engineering Contractors Association (CECA) has welcomed the publication of the government’s draft energy bill, and hailed its commitment to securing the long-term future for the UK energy in a new generation of nuclear, gas and renewable energy sources.

The bill seeks to secure a low-carbon future for the UK by investing in a new generation of nuclear power stations, the creation of new gas-fired power stations, and of large-scale renewable plants.

It puts in place measures to attract the £110 billion investment which is needed to replace current generating capacity and upgrade the grid by 2020, thereby ensuring that the UK can meet its requirement for secure and flexible supplies of energy, while meeting its carbon targets.

   Commenting, CECA director of external affairs Alasdair Reisner (right) said, “If the UK is to cope with rising demand for electricity over the next decade, a legislative framework must be put in place to ensure the delivery of an infrastructure that is fit for purpose. This draft bill is a welcome step in this direction.

“However, this bill is only one part of a longer process and there remain challenges to the delivery of new generation capacity. It is vital that steps are taken to ensure a streamlined planning process for power-related infrastructure, that projected skills needs are addressed, and that industry retains its confidence - all of which impact on its capacity to deliver such a fundamental upgrade to the nation’s energy sources.

“CECA looks forward to working with our members and other stakeholders to ensure that Britain’s civil engineering contractors are in the best position to provide their expertise in the delivery of a world-class power infrastructure for the UK in the twenty-first century.” [cwmags]

 

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Page updated: May 2012

 

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