The CPA reports that UK construction industry activity will rise in 2015, but concern lingers over the shortage in skills
The latest Construction Trade Survey – published under the auspices of the Construction Products Association (CPA) – reports that construction activity improved for the seventh consecutive quarter in the fourth quarter of 2014.
It notes that businesses across construction, from the largest contractors to small to medium enterprises (SMEs), product manufacturers and civil engineers reported output growth in Q4, with further growth expected in 2015.
Key survey findings included:
- 44% of building contractors, on balance, reported that construction output rose in the fourth quarter of 2014 compared with a year ago.
- Private housing output rose in Q4 according to 53% of building contractors, on balance.
- 40% of building contractors, on balance, reported that private commercial output rose in the fourth quarter of 2014 compared with a year ago.
- 11% of building contractors reported a fall in housing repair and maintenance output in Q4, on balance.
- 12% of contractors, on balance, reported a rise in orders for private housing in Q4.
- Orders in the private commercial sector increased according to 9% of contractors, on balance.
- Public non-housing orders (education and health) increased in Q4 according to 16% of building contractors, on balance.
- 57% of firms reported labour costs rose and 68% of firms reported that materials costs rose in Q4 compared with the previous quarter.
- 70% of building contractors reported difficulties recruiting bricklayers in Q4 compared with 41% in Q3.
“Another quarter of growth confirms the construction industry’s strongest performance in six and a half years,” stated Noble Francis, Economics Director, CPA. “Looking forward, contractors expect continued strength in private housing and commercial this year, boosted by public non-housing as a stream of work on the Priority School Building Programme gets underway.”
However, Dr Francis noted that outside of these sectors, order books weakened in Q4, suggesting a moderation in growth in 2015. SMEs, in particular, reported a ‘noticeable slowdown’ in new enquiries in Q4. “In addition, only product manufacturers felt the effects of falling oil prices in Q4,” said Dr Francis. “Contractors, SMEs and civil engineers continued to report elevated costs, which implies any gains from a wider slowdown in inflation are yet to filter down the supply chain.”
The continuing difficulties in recruiting skilled on-site trades were also likely to keep upward pressure on costs. Among large contractors, 70% reported difficulties in recruiting bricklayers in Q4, up from 41% in Q3.
Caption Despite continued growth in the construction industry, shortages in skilled labour remain a problem.