Just about holding up

With the activity index at 51 points, contractors’ workload continues to grow, although the rate of that growth has declined in the past three months. The general forecast is that the market will pretty much stay as it is.

The volume of output increased 3.5% in 2004, performing marginally better than the UK economy as a whole – GDP increased at a rate of 3.1% over the same period.

Construction output growth is expected to slow to 2.4% in 2005. The outlook for 2006 is a growth rate of 1.8%. In 2007 output is forecast to rise 2.9% as the prospects for the private housing and infrastructure sectors improve.

Following rapid growth of 20.5% in 2004, the public housing sector, driven by the government’s decent homes policy, is forecast to be the industry’s fastest growing sector in 2005.

The tender enquiries index suffered a substantial fall in March, leaving it at 54 points. Firms’ optimism about short-term employment prospects fell a point to 52. Optimism concerning tender prices however, climbed a point to 63.

The Leading Construction Activity Indicator, which provides a short-term forecast of activity levels in the industry, indicates continuing growth in construction activity over the next three months, with the growth rate fluctuating slightly over the period.