Increased government and private sector building work lifted overall construction activity during the third quarter of 2004 according to Construction industry trade surveys, a report compiled by the Construction Confederation and Construction Products Association.

Construction Confederation chief executive Stephen Ratcliffe said: “The construction industry enjoyed sustained growth during the third quarter, largely thanks to higher private housing activity and increased government building work.”

However, these positive results are tempered by rises in materials costs and labour shortages across all sectors. Both building contractors and product manufacturers reported an increase in building cost inflation in the third quarter. Manufacturers identified increases in raw material and energy costs as areas of particular concern, while contractors cited major hikes in materials and labour costs.

Overall labour availability problems also persist, with contractors reporting continued difficulties in recruiting skilled labour such as bricklayers, electricians, carpenters and plasterers.

Industry expectations remain largely positive. On balance, almost half of construction product manufacturers and 58% of building contractors expect to increase their output over the coming 12 months. While manufacturers are planning to accelerate their investment plans over the next 12 months, with spending increasing capacity.

Source

Electrical and Mechanical Contractor