Economic news continues to be disappointing, with the latest Office of National
Statistics
figures showing that construction output fell by 0.5% in the final quarter of 2011 when compared with the previous quarter. However total construction in 2011 was up 2.8% on 2010, which is encouraging. Looking at the ONS charts we seem to be back at the 2006-7 levels of activity. Perhaps we should focus on Stephen Ratcliffe, Director UKCG’s
comment on the latest results “Business conditions remain challenging but there
are also still opportunities for the industry.” My own experience is that those
companies who target a niche and offer a good product or service, backed by good
marketing, can outperform the industry.

In the housing sector there continues to be pent up demand, with the Home Builders
Federation
releasing a report that reveals that house-building in the South East has plummeted by around 37% over the past 6 years, while official government projections reveal that the number of households in the area is expected to increase by twice the current house-building level. In the short term the latest RICS Housing Market
Survey shows that with first time buyers no longer exempt from stamp duty as of the end of March, some are looking to purchase homes before the deadline and, as a result, surveyors are relatively optimistic for the coming months.

Finally, building material producers seem to be driving prices up by more than inflation or the average for manufacturer output. Latest figures from BIS show that they increased by 6.8% for the year to December compared with an increase of 4.1% for all UK manufactured
products.

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