Construction Confederation figures predict slowdown rather than full-blown recession.
A solid performance in the construction market late last year has staved off the threat of a full-blown recession.

The Construction Confederation is predicting a slight slowdown rather than a major reduction in orders after its quarterly trends survey for the final quarter last year. It had raised concerns about prospects for 1999 after a downbeat third-quarter survey.

Confederation chief executive Ian Deslandes said: "It looks as though we are in for a soft landing rather than a hard landing. The outlook is certainly more encouraging than it was three months ago." Confederation economist Chris Nicholls said: "Last year there was a lot of concern that the economy was heading for a recession and how deep that would be. The UK may slip into a technical recession in the first half, but I don't think there's much chance of a return to the sort of recession we saw in the 1980s and early 1990s." The survey found that 5% more construction firms reported an increase of output in the final quarter of 1998 than reported a decrease.

The commercial building market continued to decline, but public non-residential work rose.

The Midlands and North-west markets were most buoyant, while smaller contractors in the London market continued to be most pessimistic.

Firms reported increased enquiry levels, reduced cost pressures and an easing of skills shortages. But Nicholls said there was anecdotal evidence from confederation members that long-term prospects were deteriorating. "There is a concern about falling workloads on our 12-18 month horizon," he said.

North of the border, the latest Scottish Building Employers Federation survey shows growth in the Scottish market has also slipped back.

In the federation's fourth-quarter survey, 22% of firms reported an increase in workload, compared with 96% the quarter before.

Scots firms also reported a decline in enquiry levels, with the housing repair and maintenance market affected most severely.

Meanwhile, a gloomy Civil Engineering Contractors Association's workload trends survey has confirmed the parlous state of the civil engineering sector.

Of the firms surveyed, only 2% more reported increasing, rather than decreasing workloads.

Not only has the industry been hard hit by cuts in the government's roads spending programme but prospects in its brightest hope, the water and sewerage sector, also declined.