In this month’s Tracker, Experian’s Business Strategies division reports an optimistic market, with activity growing at a steady pace – and predicts it will pick up speed at the start of 2005
Contractors’ activity continued to grow during October, with the activity index remaining stable but positive at 56 points.
The orders index increased in October, up two points to 69, whereas the tenders index stood at 57 points, unchanged from September.
Firms are more optimistic about short-term employment prospects than a month ago, with the index increasing two points. There is also increased optimism regarding tender prices with the index increasing by five points.
The Leading Construction Activity Indicator, which provides a short-term forecast of activity levels in the construction industry, indicates continuing growth in construction activity over the next three months and suggests that the rate of growth may start to pick up around the beginning of next year.
According to Experian’s latest output price forecast, output prices are set to increase by 9% in 2004. However, this will be the peak of output price growth with increases of 7.9%, 5.6% and 3.6% forecast for 2005, 2006 and 2008 respectively.
The greatest increases are expected in the private housing sector where a 43% increase in output prices is forecast for the period 2004-2008.
Over the same period all other sectors are expected to increase output prices at least 20%, with the exception of the industrial sector, where output prices are set to remain largely unchanged.
This an extract from the monthly Focus survey of construction activity undertaken by Experian’s Business Strategies division on behalf of the European Commission as part of its suite of harmonised EU business surveys. The full survey results and further information on Experian - Business Strategies division’s forecasts and services can be obtained by calling 0870-196 8263 or logging on to the website www.constructionfutures.co.uk
The survey is conducted monthly among some 800 firms throughout the UK and the analysis is broken down by size of firm, sector of the industry and region. The results are weighted to reflect the size of respondents. In addition to the results published in this extract, all of the monthly topics are available by sector, region and size of firm.
In addition, quarterly questions seek information on materials costs, labour costs and work in hand.