NFB sees construction output continue to fall

Construction output fell by 9.3 per cent in the fourth quarter of 2012, compared with the same period in 2011, according to figures published by the Office for National Statistics (ONS). There was, however, an increase of 0.9 per cent when compared to the third quarter of 2012.

While some areas of the industry, such as private housing (5.9 per cent) and infrastructure (4.2 per cent) showed some growth, the volume of all new work fell by 11.6 per cent.

The ONS’ figures provide a similar picture to that painted by the quarterly industry survey that measures activity of National Federation of Builders’ members and others. Industry figures point to rising materials, energy and bidding costs being felt more keenly because of lower capital spending and demand that has fallen for 20 consecutive quarters. Among SME contractors, 23 per cent reported a fall in demand, compared with Q3 2011.

Julia Evans, the chief executive of the National Federation of Builders, said: “The construction industry is braced for a year in which weak demand and higher costs will create a very challenging trading environment, especially for SMEs who, given the industry’s challenges in accessing finance, are not as well placed to weather this prolonged downturn.

“As the government and industry collaborate to lay out a long-term strategy for the industry, we must not lose sight of the need to maintain the current capital investment plans that will generate economic growth in the more immediate future.”