Research commissioned by Construction News (CN) forecasts that starts on site will fall in value this year in 8 out of 10 sectors.
As expected, predicted private housing starts sank (from £11.96bn worth of actual starts in 2007 to £10.89bn of predicted starts in 2008), but so too did sectors previously thought to be robust such as social housing (£3.38bn actual starts in 2007, versus £3.32bn predicted for 2008) and infrastructure (£5.58bn, 2007 versus £5.50bn in 2008). Only health (£1.80bn in 2007 versus £2.09bn in 2008) and education starts (£5.16bn in 2007 versus £5.39bn in 2008) will be up this time round.
Meanwhile, Persimmon has asked its subcontractors to cut labour rates in a further effort to reduce costs, reports Contract Journal (CJ).
In a letter to trade contractors, Persimmon Homes South Midlands said the cuts were necessary to restart work on mothballed sites in the region. 'We are looking for you to reduce your labour costs to around £100 per day where possible,' the letter said.
The UK's economic problems, coupled with a growing residential construction market in Poland, are causing an exodus of Polish workers, reports CJ.
A report by Polish research company PMR Publications predicts that the Polish residential market would increase 50% to £4bn in 2008, with approximately 170,000 housing completions. And it will continue to grow, reaching a peak of 200,000 completions in 2010, before dropping off.
The Home Office saw a 26% drop in the number of applications for work permits from eastern European nationals between April and June and blamed the decrease manily on a fall in Polish applicants.
Finally, CN reports that credit insurance policy costs for subcontractors are skyrocketing. The policies, which cover against potential non-payment by house builders for work already carried out, are escalating in price and CJ claims there are fears that some insurance companies will steer clear of housing suppliers until the market improves.