Manufacturers’ output cut, a third of architects may face bankruptcy, 537 construction firms folded during third quarter

Falling demand has forced materials manufacturers to cut jobs and slash production by 20%, reports New Civil Engineer.

Cement manufacturer Cemex has announced plans to permanently shut down its Barrington plant in south Cambridgeshire, leaving 87 people redundant. A company spokesman said UK cement demand was expected to fall by 19%, and ready-mix demand to drop by about 20%.

The housing market slump has also forced steel manufacturer Corus to cut production of crude steel by 20% or 1 million tonnes between October and December, a measure thought likely to extend into the next quarter. On its website, Construction News revealed that Corus will also cut 400 jobs at its distribution business, including 100 in the West Midlands, almost 100 in Shotton, North Wales, 50 in south Wales and 50 in Leeds.

A third of architectural practices made so little profit during the past decade of economic growth that they could face going bust during the credit crunch, an RIBA survey has revealed.

The RIBA Business Benchmarking Survey, reported in Building Design magazine, shows that just 67% of firms met the industry safe standard of profits equalling 15% of total turnover. The news came as RIBA president Sunand Prasad, fearful of a rise in redundancies in the profession, called for out of work architects to consider a radical career move into planning to ride out the recession.

Moving to the construction sector, Building magazine reports that 537 construction firms folded in the third quarter, a 15% increase on the second. The figures, compiled by Pricewaterhouse Coopers, show that the 537 compared to 462 in Q2 and leapt 46% compared to Q3, 2007.

Meanwhile, Morgan Sindall announced that it will make 30 redundancies at its Morgan Ashurst unit. And Rok announced that it would cut 750 job, equivalent to 15% of its workforce, following a shock profit warning for the four months to November 2008. This includes the 200 redundancies announced in September and the 30 in August.

In more positive news, regional development agencies (RDAs) could be used to help speed up the distribution of a £4bn lifeline to small businesses hit by the credit crunch.

The Federation of Small Builders is in talks with the RDAs over a deal that would see the agencies speed up the distribution of the £4bn allocated by the European Investment Bank. The cash has been allocated to industries, including construction, to help small firms struggling to cope with the pressures of reduced bank lending and a drop in workloads.