In this month’s look ahead at the market, Experian Business Strategies predicts that increases in orders will not be enough to stop the growth in activity slowing down over the coming months
Contractors' activity continued to grow during January, although the rate of growth, as measured by the activity index, fell two points to 56.
The orders index also fell a couple of points in January to 69, and the tenders index stood at 55 points, down three from December.
Firms are slightly more optimistic about short-term employment prospects in January, with the index increasing one point to 51. Optimism concerning tender prices, however, is reduced from December with the index falling two points – although it still remains high at 66.
The Leading Construction Activity Indicator, which provides a short-term forecast of activity levels in the construction industry, indicates continuing growth in activity over the next three months but suggests that the rate of growth is likely to decline slightly over the period.
New work construction orders increased 6.2% between 2003 and 2004 nationwide. The greatest increase was in the commercial sector where new work orders were 19% greater in 2004 than in 2003. Both private and public housing also recorded substantial increases, up 16% and 17% respectively. The infrastructure and industrial sectors were the only sectors to record a fall in orders, down 28% and 10% over the same period.
In the regions, East Anglia recorded the greatest year-on-year increase, with new work orders up 44% in current prices. The South-west also performed well, recording an increase of 27%, whereas the North-west was the only region to suffer a fall in orders (–1%).
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’ forecasts and services can be obtained by calling 0870-196 8263 or visiting the website at www.constructionfutures.co.uk
The survey is conducted monthly among about 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.