Page 38 - Contractors World -UK & Ireland Vol 2 No 4 (May 2012)

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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.”
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Page 38
Contractors World - UK & Ireland Vol 2 No 4
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 bi l l seeks to secure a low-carbon
future for the UK by invest ing 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
i ts requi rement
fo r s ecu re and
flexible supplies
of energy, while
m e e t i n g i t s
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
streaml ined 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 del i very of a wor ld-c lass power
infrastructure for the UK in the twenty-first
century.”
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