The latest Trade Survey from the Construction Products Association (CPA) has revealed that the construction industry enjoyed a strong start to 2017, while optimism remained high for the year ahead.
The strong opening in the first quarter of 2017 was reported by SMEs, civil engineering and driven by increased sales, output and workloads.
There was, however, a downturn in fortunes in the commercial and industrial sectors as 31% of main contractors experienced a decrease in output in comparison to the same period last year.
The majority of sectors saw a decrease in future orders for both main contractors and civil engineering contractors.
The CPA’s survey also reinforced one of the most pressing issues facing the construction industry as inflation continued to apply pressure on input costs.
The figures showed civil engineering contractors (84%), main contractors (86%), heavy side manufacturers (93%) and light side manufacturers (93%) all reported an increase in raw materials costs.
Rebecca Larkin, Senior Economist at the CPA, commented: “Q1 was a positive opener to 2017 for product manufacturers, specialist building contractors and SME builders, continuing the momentum built up over the last four years of growth. For main contractors, however, it was only private sector house building that provided the bright spots of activity during the quarter. Falling orders in the commercial and industrial sectors also spilled over into infrastructure in Q1 and signal a broader weakness ahead.
“Furthermore, in contrast to the continued rise in costs reported during the quarter, particularly for imported raw materials, building contractors’ tender prices are moving in the opposite direction. This suggests that it is margins, rather than clients, that are bearing the brunt of cost inflation.”
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