Infrastructure orders in the second quarter of 2001 were 42% lower than the previous quarter and 22% lower than the same quarter a year ago. Private commercial orders were 23% lower compared with the first quarter of 2001 and 20% lower than a year ago. Private industrial orders were 2% lower than the previous quarter but were 2% higher than a year earlier.
The DTI suggests that the downturn in orders is "due mainly to the high results reported in the first quarter, which was the highest quarter for three years."
Building tender prices rose by 2% in the second quarter, according to cost consultant Davis Langdon and Everest (DLE). Prices have now risen 7·5% over the last 12 months but DLE predicts that "deteriorating economic conditions look set to dampen future price inflation." DLE suggests that the construction industry will need to redeploy resources currently employed on private development towards public spending but says: "The speed with which PFI/PPP arrangements can be put in place is now the biggest future concern for the construction industry."
Many are already feeling the pinch. Electrical engineering group ABB is to shed 12 000 jobs following a 62% drop in second quarter profits. ABB's shares are at a two-year low. The uncertainty has also affected the shares of Schneider and Invensys.
Source
Electrical and Mechanical Contractor