The Office for National Statistics’ latest construction output figures show that the total volume of construction output fell by 3.9% in Q2 compared with Q1. Volume of all new work in Q2 fell by 4.6% compared to Q1. Most sectors of construction activity shrank considerably over the last year and overall construction activity contracted by 9.5% in a year. Echoing this Glenigan reported that the total value of construction output fell by 5.2% in Q2 of 2012.
In July the Nationwide House Price index reported a 0.7% fall in house prices, and the
Halifax House Price index a 0.6% fall over the month. The RICS UK Housing Market
Survey has reported that London is the only region recording rising house prices and that prices are expected to fall further in the coming months.
Some of the larger organisations in the sector have been able to weather the storm with Taylor Wimpey’s half year results showing profit has increased by 170% against last
years. Laing O’Rourke announced their full year results, which saw total group revenue
increase by almost 8% to £4.3 billion last year, as their earnings improved
slightly. Despite the tough outlook they have a strong pipeline of contract opportunities in key sectors and remain on track to deliver 2012/13 financial targets.
With most industry representatives calling for the government to take action to stimulate the construction sector there have been some initiatives, including the announcement of financing for the Green Deal and an initiative to try and get stalled housing sites unblocked.