10 industry news
Rising cost pressures expected to dent industry growth, says CPA
hamper growth going forward, according to the Construction Products Association. Despite increases in sales, output and work-
F
loads being reported during the quarter, the CPA said its Construction Trade Survey Q4 said that “forward-looking indicators suggest the outlook for building activity during 2017 has worsened.” Te survey showed that 75 per cent of main con- tractors, as well as 78 per cent of heavy side manufacturers and 88 per cent of light side man- ufacturers reported a rise in raw materials costs. Te latest statistics also “highlighted a skills
shortage affecting key on-site trades with main contractors reporting shortages of carpenters and plasterers at their highest in nine years,” said CPA. Commenting on the survey, Rebecca Larkin,
senior economist at the CPA, said: “Te con- struction industry closed 2016 on a strong note, with activity improving for firms throughout the supply chain. However, order books and
irms across the construction industry have reported a further rise in raw material prices during Q4 of 2016, which could
enquiries were lower for contractors and signal a weaker outlook for 2017. She continued: “Cost pressures continued to
rise, particularly for imported raw materials, and compound the risks that activity will be unable to grow at current rates over the next 12 months. Whilst government has a role to play in provid- ing certainty for projects, industry will need to find ways to navigate rising costs.” Richard Beresford, chief executive of the
National Federation of Builders commented: “Te decrease in both public and private housing is a call to the Government to be bold in its hous- ing aspirations. When Teresa May came to office, she promised to deliver an economy that works for everyone. If we cannot provide people with the most basic requirement such as a roof over their head, then the Housing White Paper will have failed.” Brian Berry, chief executive of the Federation
of Master Builders said: “Rising material prices and growing skills shortages dampened growth among construction SMEs in the final three months of last year. Te optimism that we saw
from small construction firms during most of 2016 has now dropped off because of growing concerns about rising costs. Te pledge from the Government that it will focus on finding ways to boost smaller scale house builders is therefore timely as it’s an area that is ripe for growth and could help counteract the risk of stagnation within the SME part of the con- struction industry.”
Key survey findings included:
· 38 per cent of main building contractors reported that construction output rose in the Q4 of 2016;
· 12 per cent of SME contractors reported increased workloads in Q4 compared to three months earlier;
· Main contractors reported a decrease in orders in private and public housing;
· 71 per cent of main contractors reported diffi- culties recruiting carpenters, 67 per cent for plasterers and 40 per cent for bricklayers in Q4.
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