Contracts increase but the future looks edgy
Contract awards for building projects increased in November according to the latest CPA/Barbour ABI building index. At 115, the overall building (excluding infrastructure) index was relatively strong, buoyed by an increase in commercial offices and retail contracts. Elsewhere, November’s results were more subdued. Public sector indices were lower than in November 2010 and private house builders remained hesitant.
This data provides an indication that 2011 has been better than anticipated. However, the timing between a contract award and the start of work on site can vary; furthermore, the start of the project can by no means be guaranteed.
Consumers, burdened by high inflation and uncertain job prospects, are wary. Trading prospects with our largest export market have not been strengthened as a result of David Cameron’s decision to distance the UK from Europe last week. The outlook is highly uncertain.
Kelly Forrest is a senior economist at the Construction Products Association