The latest pan-industry trade survey compiled by the Construction Products Association economics team paints a perhaps predictably gloomy picture of the state of the industry in the second quarter of this year.
The survey suggests that the upswing it recorded in output from contractors in the first quarter was short-lived. The balance of firms doing more work and those doing less was put at -37%. That’s the worst figures for a year and a half.
The more detailed figures suggest that it was just the commercial sector that grew in 2011 Q2, while small contractors saw their 14th consecutive quarter of decline on this survey’s figures.
The survey also suggests that the effect of this continued lack of work is feeding through in the form of more cut-price contracts, lower profit margins, more job cuts and lower wages. That said there is no sign of a let up in the cost pressures from rising materials prices.
The only bright spot seems to be that the materials firms are finding more sales in markets overseas. And they are fairly upbeat about the prospect for their sales.
Building contractors on the other hand are positively gloomy with very negative results coming through in the survey about prospects in every sector.
In many ways this survey tells us pretty much what the more gloomy have been suggesting for some while – that this recession is not going to evaporate quickly or without protracted pain.
The take put on the figures by Noble Francis, economics director at the Construction Products Association, is that we are now beginning to see the effects of the public sector cuts working through and he points out that the compensation being provided by the private sector is rather anaemic.
This is consistent with most of the construction-related data we have seen recently.
Looking beyond what this survey can tell us, the increasingly unsettling events within the global financial markets are increasing the downside risks for the industry and so lengthening the likely time before the industry sees more palatable times.
The future might be the same as it was yesterday, minus a day, but it looks a little less rosy today.