CPA forecasts 3% growth in 2012 despite weakening consumer spending
Throughout 2011, contract awards for retail work held up pretty well but from November’s relatively high level, the CPA/Barbour ABI retail contract awards index fell away sharply, by nearly 20% month-on-month.
Large food retailers, with their aggressive expansion plans designed to increase market share, played a key role in boosting activity in 2011.
However, for many of these, January has been truly blue, and the UK’s largest supermarket chains have revealed just how challenging the 2011 pre-Christmas trading period was.
Further weakening in economic prospects and consumer spending in 2012 will surely prompt the re-evaluation of some investment decisions.
Time will tell if the weakness in retail contract awards in December was merely a hiatus, or the start of a more fundamental contraction in work caused by supermarkets’ fears about profitability.
The latest forecast from the CPA leans to the former, anticipating retail construction output growth of 3% in 2012. Choosing to sit tight can lead to an offering becoming tired in a competitive marketplace.