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Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
UK economic news
Article Type: Newsbriefs From: Structural Survey, Volume 29, Issue 3
Keywords: Construction, Economy, House prices, Tenders
Construction industry slows. The RICS Construction Market Survey, shows workloads fell during the last quarter of 2010, as government spending cuts and a lack of commercial finance took their toll on the industry. Five percent more surveyors reported total construction workloads falling rather than rising. Although this is a slight improvement from Q3 (−10 per cent), work levels varied strongly across the UK.
Housing market remains sluggish. The UK housing market remained sluggish during January 2011, due to continued lack of buyer demand and low levels of supply, says the January Housing Market Survey. Seven percent more surveyors reported demand for property fell rather than rose (from −12 in December), indicating potential purchasers remain cautious about the outlook for the economy and the possibility of mortgage rate increases later in the year.
Tender prices rose by 0.5% in Q3 2010 according to the latest UK construction Tender Price Index compiled by BCIS, The Building Cost Information Service of the Royal Institution of Chartered Surveyors. Tender prices also rose by 0.5 per cent in Q3 2010 compared with a year earlier, the first annual increase in prices since mid-2008. Despite the forecast fall in new work output for 2011, the significant rise of output throughout 2010 means that 2011 will remain in the order of 10% higher than 2009 levels, but still 6 per cent lower than the pre-recession levels seen in 2007. Construction orders have been falling for the last four quarters pointing to the slowdown in workload expected in 2011.
EC Harris forecast. Market view UK – Winter 2010/2011. The recovery of the UK economy has been slower than expected and for the construction industry a “double dip” in workload remains a distinct possibility. Commodity prices continue to accelerate with record prices being recorded for some commodities. Contractors remain under pressure and the danger period is approaching; past recovers indicate that as the industry recovers insolvencies are likely to increase.