In this month's market overview, Experian Business Strategies reports that levels of growth will fall by December, followed by a further slowdown next year – except in the booming housing sector
Construction activity has gradually been rising since July and this trend continued in August, with a one-point increase to 58. The employment and orders indices were down in August, although the tender prices index was unchanged, and tender enquiries were up.

Overall constraints on activity levels fell, despite more companies citing insufficient demand as a constraint (up 4% to 23%).

The construction industry is experiencing a mixed bag of conditions across the regions, with Scotland, Wales, the North and the South-west experiencing strong growth in August, but Northern Ireland, the South-east and the North-west all recording falls.

Growth is expected to slow over the next three months according to CFR's Leading Construction Activity Indicator. The indicator, which provides a short-term forecast of activity levels in the construction industry, suggests activity is set to be nudged downwards from 55 in September to 54 by December, indicating a slight slowdown in the rate of growth.

According to Experian Business Strategies' latest forecasts, last year's 8% construction activity growth is expected to be followed by more moderate growth of 4.4% in 2003, falling to 3.3% in 2004. Public sector house building helped to boost the industry forecasts for the next few months and into 2004, with a large increase in orders, but the commercial sector is due to experience a downturn.

The survey is conducted monthly among some 800 firms throughout the United Kingdom 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.

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Postscript

This an extract from the monthly Focus survey of construction activity undertaken by Experian Business Strategies 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; website www.constructionfutures.co.uk

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