growth in Industry output has stalled for the first time since the beginning of 1996, the Construction Confederation’s second quarter survey has warned.
The Construction Trends Survey found that output growth was static between the first and second quarter of 2000, with a 1% fall in the balance of respondents reporting an increase compared with a decrease.
Public new housing was worst hit, with a balance of –20% of firms reporting a drop in output. Infrastructure and repair and maintenance are weak, and housing and non-residential repair and maintenance has increased only 4%.
However, Construction Confederation president John Gains said the slowdown was a blip rather than the first sign of a downturn.
“There is a huge pent-up requirement for public housing but it remains stagnant because of the difficulty of getting funds through the system to where they are needed,” said Gains.
“The commercial building market remains strong, with significant regional variations, but I think that will also slow,” he added.
The picture is particularly gloomy in northern England. “The North remains of considerable concern. The region has shown little signs of improvement but it is hoped that the comprehensive Spending Review will impact if the spending gets through to the workface,” said Gains.
A balance of +36% of the firms surveyed expect output to increase during the third quarter of 2000 and to rise over the next 12 months. The most buoyant sectors are private new housing and commercial building.
Although the survey was carried out before the chancellor announced the results of the spending review, a balance of +16% of civil engineering firms were confident that output would become more lively in the next year. According to the study, only 34% of civil engineers were operating at or near full capacity in the second quarter.
