The confederation’s second-quarter trends survey found that 21% more firms reported a rise in enquiries rather than a drop. In the first quarter of 1999, 2% more firms saw a fall rather than an increase in enquiries. Seasonal adjustments put the second quarter figure at 24% – up from 9% on a year ago.
Confederation chairman Clive Benfield said: “The results from the latest survey are encouraging and add weight to other surveys, showing the industry expanding.” Total workloads also rose during the second quarter, but at a slower rate. The balance of companies reporting a rise in workload picked up from 13% in the previous quarter to 19%.
At the same time, the number of companies expecting an increase in workload over the next quarter rose from 22% in the first quarter to 33%. For the next 12 months, 46% more companies expected higher workloads than expected lower – up from 33% in the first quarter.
Reduced interest rates led to more new-build housing work, with 15% of firms reporting increased output – up from 7% on the same period last year.
But 17% of companies reported a fall in public housing workloads, the lowest output in the sector for more than a year.
Regionally, London-based contractors saw the biggest improvement, with 53% reporting a rise in output. In the previous quarter, 69% reported a fall. Welsh contractors reported the worst conditions, with 13% noting a fall in the second quarter.
Benfield said: “The anecdotal evidence is that the effect of money pumped into major projects in Cardiff is coming to fruition and there is not that much extra work.
“Also, with the bottom falling out of Far Eastern investment, and in particular electronics, there have been a lot of project cancellations.” Benfield added that civil engineering tender margins were down 13% on the previous quarter and 12% on the same quarter in 1998, whereas builders tender margins were down 2% on the quarter.
“Contractor’s tender margins are still under pressure, and have weakened further since the last survey,” he said.
Benfield also sounded a warning about the impact of skills shortages on the industry over the next year.
“We must not forget that, even though the majority of the industry is looking forward to higher workloads, there are still areas of concern. In particular, recruitment difficulties have increased,” he said.
Of companies that had difficulty recruiting, 73% could not find bricklayers, 55% plasterers, 51% skilled civil engineering operatives and 49% carpenters and joiners.
“This shortage of labour may lead to cost increases,” said Benfield.
