The latest Construction Trade Survey from the Construction Product Association ( CPA ) published today reveals that construction activity increased across the supply chain in the first quarter of the year.
This is the 12th consecutive rise increase reported by construction products manufacturers representing the beginning of the supply chain, through to main contractors, specialist contractors, SME builders and civil engineers carrying out work on the ground.
The survey found that 9% of main building contractors, on balance, stated that construction output increased in the first three month of 2016 compared with a year ago.
38% of specialist contractors reported a rise in output during the first quarter of 2016.
13% of SME contractors reported increased workloads in Q1 in comparison to the previous quarter.
13% of civil engineering businesses said they noted arise in new orders in Q1.
In terms of a decrease in workloads, 13% of main contractors reported a downturn in orders in private housing and 42% reported a drop in public new housing orders.
Half of the main contractors surveyed experienced problems in recruiting carpenters, 40% for bricklayers and 36% for plasterers in Q1.
74% of civil engineering contractors reported an increase in costs, whilst 42% of main contractors reported labour costs rose in Q1 in comparison with the previous three months.
100% of heavy side product manufacturers said that wages and salaries increased from last year.
Rebecca Larkin, Senior Economist at the CPA, commented: “After a slowdown at the end of last year, firms throughout the construction industry experienced a stronger opening quarter in 2016. In spite of this, the clear theme for Q2 is uncertainty, with main contractors reporting lower orders in all sectors as projects are paused or postponed ahead of the EU referendum in June.
“Beyond that, firms continued to indicate that a shortage of skilled workers is the largest threat to construction activity over the rest of the year. Main contractors reported difficulties in recruiting bricklayers, carpenters and plasterers in Q1, whilst low availability of labour was also reflected in upward pressure on wage bills among product manufacturers and civil engineers.”
Suzannah Nichol, Chief Executive of Build UK said: “There continue to be mixed messages in terms of growth; however, industry intelligence shows increasing levels of activity over the last quarter. Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels.”
Richard Beresford, Chief Executive of the National Federation of Builders, said, “Uncertainty over the outcome of the EU referendum and over the nation’s defining issue – housing – is reflected in slowing industry performance. While homes will continue to be built, as long as there is uncertainty over government policy, we will not be able to provide anywhere near the number of homes people need.”
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