CPA reports that private housing rate slows but all other sectors are encouraging
The latest Construction Trade Survey has reported that construction activity rose in Q3, the sixth consecutive rise in activity.
Although private housing output slowed, this was offset by growth in all other sectors. Businesses across construction, from small to medium enterprises (SMEs) to the largest contractors, reported increased output in the third quarter.
Private housing activity slowed in Q3 with 35% of firms, on balance, reporting that private housing output rose compared with 57% in Q1 and 41% in Q2. This slower growth in private housing, however, was offset by significant growth in other sectors.
On balance, 43% of firms reported growth in private commercial, the largest construction sector, which covers offices and retail work. A further 41% of firms, on balance, reported work growing in the private industrial sector, which covers factories and warehouses construction.
Construction firms also reported rises in forward looking indicators such as orders and enquiries, which clearly indicate that activity will rise throughout 2015. A rise in Q3 order books in private housing was reported by 15% of contractors, on the whole. A further 13% and 12% of firms reported rises, on balance, in orders books across private industrial and public non-housing (education and health) respectively.
“Construction firms reported growth once again in the third quarter of 2014, the sixth consecutive rise in activity for the first time in six and a half years,” commented Noble Francis, Economics Director, Construction Products Association (CPA). “Activity rose in the third quarter according to 60% of contractors, overall. The only dark clouds in construction were seen around margins, which continued to be hit hard. Construction firms had to suffer rises in costs in Q3 once again and although tender prices also rose in Q3, the benefits of these tender price rises are only likely to be felt when the work from these contracts occurs in 2015.”
Caption Encouraging growth in construction, except there was a slowdown in private housing in Q3.