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Construction industry grows for eighth quarter

The construction industry reported an eighth consecutive quarter of growth, according to the latest Construction Trade Survey from the Construction Products Association, published this morning (May 13).

Construction industry grows for eighth quarter

Large contractors, SMEs, civil engineers and product manufacturers all saw output grow and are expecting further expansion throughout 2015.

Dr Noble Francis, economics director at the CPA, said: “Activity rose in the first quarter of 2015 compared to a year earlier according to 50% of contractors, on balance. Furthermore, increases in orders and enquiries indicate that the construction industry’s longest expansionary streak in six years is set to continue over the next 12 months.

“Increased activity was led by the private housing sector, in which 54% of firms, on balance, reported a rise in output. Increased output was also reported in private commercial, the largest construction sector, where 23% of firms, on balance, reported rising volumes of offices and retail work.

“This momentum is set to continue, as it was in the private housing and commercial sectors that contractors registered growth in order books in Q1. Specialist contractors and SMEs also reported a noticeable upturn in new enquiries in the quarter.

“A balance of 81% of contracting firms experienced cost increases during Q1 and 63% reported an increase in labour costs. In addition, 59% of contractors reported difficulties in recruiting plasterers in Q1 and 56% experienced difficulties in the availability of bricklayers. Ongoing difficulties in recruiting skilled on-site trades will contribute to this upward pressure on costs.”

Dr Diana Montgomery, Chief Executive of the CPA, said: “Surveys from the CPA, wider industry and independent sources indicate that the UK construction recovery appears set to continue through 2015. Despite rising costs and general election uncertainties, enquiries and orders are clearly translating into activity on the ground and contributing to steady and consistent growth.”

Key survey findings include:

  • 50% of building contractors, on balance, reported that construction output rose in the first quarter of 2015 compared with a year ago

  • Private housing output rose in Q1 according to 54% of building contractors, on balance

  • 23% of building contractors, on balance, reported that private commercial output rose in the first quarter of 2015 compared with a year ago

  • 9% of building contractors reported a fall in both housing and non-housing repair and maintenance output in Q1, on balance

  • 9% of contractors, on balance, reported a rise in orders for private housing in Q1

  • Orders in the private commercial sector increased according to 25% of contractors, on balance

  • Public housing orders decreased in Q1 according to 45% of building contractors, on balance

  • 63% of firms reported labour costs rose and 81% of firms reported that materials costs rose in Q1 compared with the previous quarter

  • 59% of building contractors reported difficulties recruiting plasterers in Q1 compared with 31% in Q4

  • About Fiona Russell-Horne

    Fiona Russell-Horne
    Group Managing Editor across the BMJ portfolio.

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