The latest figures from the Office for National Statistics show that construction output fell 6% in May compared to a year earlier. It was up on April but that was a very low month. The Construction Products Association described the outlook for 2012 as bleak. A combination of the economic uncertainty, the long Jubilee bank holiday and bad weather has delayed projects. London, where most of recent growth has been, will also see sites shutting down for the Olympics and Paralympics. These views have been supported by the Construction Products Association’s latest State of Trade Survey which describes prospects as increasingly challenging. The Chartered Institute of Purchasing Managers Survey for  June reported that construction activity fell at the fastest rate for 2½ years. The RICS UK Housing Market Survey reported a fall in both prices and activity. Finally the BNP Paribas / Tristan Fitzgerald report Housing the Nation anticipates housing completions at below 100,000 this year, which would be more than 20% down on last year.

Some positive news, reported by Glenigan, is that the value of shelved projects has continued to fall and is 29% lower than the equivalent period a year ago. Glenigan see this as an indication of improving private sector developer confidence.

This week there have been announcements of new initiatives such as £9 billion of rail investment, where station upgrades will provide some general contracting work. Ofgem
has announced £22 billion of work
to upgrade the gas and electricity networks. Unfortunately infrastructure projects take time to plan so will not impact on this year or next. Most recent has been the Treasury announcement of guarantees to back financing of £40 billion of projects and a temporary lending programme to get £6 billion of PPP projects underway. These are reported to be in Transport, Health, Housing and Education.

To try and persuade the government to do more for the construction industry go to the Get
Britain Building
website. Here you can sign an online petition and get a standard letter to send to your MP. The more noise our politicians hear from the construction industry the more likely they are to do something.

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