February’s Markit/CIPS Construction PMI report points to an increase in activity in the UK construction sector, continuing the strong start to 2011.

The seasonally adjusted figures came in at 56.5 for February, up from 53.7 in January and an eight-month high. A figure above 50 represents growth, while anything below 50 represents a decline.

In a positive sign for the industry, the report said: “Panellists commented that opportunities to tender had increased, with some companies also noting that decisions had been made on previously quoted work.”

“UK construction companies were optimistic in February that activity would increase over the coming year, as overall economic conditions continue to improve and customer confidence increases.”

Economist at Markit and author of the UK Construction PMI report, Sarah Ledger, said: “February’s survey showed continued recovery in the UK construction sector following December’s weather-related decline in activity, with output rising at the fastest rate in eight months on the back of strengthening growth of new business.”

“The latest figures therefore suggest that, having contracted by -2.5% in the final quarter of last year, the ONS measure of construction output should bounce-back into positive territory in Q1.”

“Demand and supply side pressures continue to push up purchase prices, with construction costs rising at the fastest rate since August 2008 and delivery delays the worst for over three years. Concerns about rising costs and fears over cuts in public spending meant future business optimism remained subdued and well below the long-run average.”

The report continues the positive sentiment experienced in January but Government spending cuts have yet to fully kick in so some firms are still predicting a tough 2011.

BuilderScrap sourced this article from Building.co.uk

The Interbuild show has been cancelled. The show which is now called BEST confirmed that the event had been forced to cancel after organizer Emap said it “could not guarantee the scale or scope of event that customers demand and expect.”

The shows numbers have been falling for a couple of years now; despite BuilderScrap’s attendance since 2008 the show has seen a drastic fall in exhibitors and visitors.

The publisher confirmed: “Built Environment Solutions & Technologies (BEST), Interbuild Onsite and Glassex will not run in 2011.” The two sister shows; InstallerLive and The Infrastrure show are expected to run at the NEC in October 2011.

The firm is planning to launch a new show in 2012 with details promised later in the year.

An Emap statement said: “Whilst many leading companies had committed to the BEST proposition in 2011, the economic downturn and unprecedented challenges facing the industry meant that Emap could not guarantee the scale or scope of event that customers demand and expect.”

Richard Baker, MD of Emap Connect’s Construction portfolio said: “We believe this is the right decision at the right time.”

“Market conditions are very tough and the industry needs a more targeted event which reflects the challenges of today’s UK construction industry.”

“We will now be fully engaging with all parts of the market about plans we have to better serve the construction industry moving forwards.”

“We still believe there is a need for a clearly targeted construction show of significant scale in the Midlands, and we will now consult openly with trade associations, potential exhibitors and visitors as to the precise format this should take in 2012.”

BuilderScrap sourced this article using Construction Enquirer.

The Government will be giving an extra £100m to councils to meet the growing need to repair the potholes in England. The £100m is on top of the £831m the Government has already given to council for road maintenance this year.

The money will be split according to the amount and condition of roads each council has responsibility for.

Transport Secretary Philip Hammond said: “I am determined to see the winter damage to our roads fixed as quickly as possible.

“This money should make a real difference to the millions of drivers who are fed up with having to battle against dangerous potholes.”

Councillor Peter Box, chairman of the Local Government Association’s economy and transport board, said: “Even as council budgets are being cut, it is vital that road maintenance is sufficiently funded over the coming years if we are to avoid roads crumbling into disrepair.”

The government has committed £3billion to road maintenance over the next four years.

BuilderScrap has sourced this article using Building.co.uk

The Federation of Master Builders (FMB) has called on the Government to create a green budget to support hard-pressed small to medium sized builders.

The association wants a lower rate of VAT on home energy efficiency improvements, they say it will help keep SME’s afloat and help towards the strict climate targets that have been set for the UK.

Research by Experian last year estimated that 11,000 jobs will go in the housing repair, maintenance and improvement sector over the next decade as a result of January’s VAT hike from 17.5% to 20%.

The FMB also called on the government to reduce stamp duty to stimulate the flagging housing market.

Brian Berry, director of external affairs at the FMB, said: “In the current economic climate householders will need more than just loans, as currently proposed by the government in its Green Deal finance package, to make existing homes more energy efficient.”

“A reduced rate of VAT to 5% for all energy efficiency improvement projects would provide that boost as well as create much needed jobs in the building industry.”

“The construction industry’s prospects for 2011 look bleak. Small and medium sized building companies are continuing to report falling workloads and a third expect to have to cut staff this year.”

“The stimulus effect of a targeted VAT cut would far outweigh the cost to the Treasury and would help to deliver the government’s low carbon policy objectives.”

BuilderScrap sourced this article from Building.co.uk

In 2010 house building completions plummeted to its lowest level for 88 years, according to figures released this week.

There were only 102,570 homes completes in England in 2010, which is a 13% drop from 2009 and the lowest overall since 1923.

The figures were released as the government published details of New Homes Bonus, which they hope will kick-start the house-building industry. Under the programme the government will match the council tax raised from new homes for the first six years, which for an affordable home will mean an extra £350 per house each year. Housing minister Grant Shapps said that there will be £200m in cash bonuses for communities as part of the first wave of the scheme.

Steve Turner of the Home Builders Federation warned house-builders needed clarity on planning policy and localism for the new scheme to have an effect.

“Today’s figures reveal the extent of the housing crisis and we need real action now to prevent the crisis deepening.”

“The problem is that we have a planning system in the midst of radical change, expensive and unnecessary red tape and a shortage of mortgage availability.”

“The New Homes Bonus is a key part of this and going to be a very important way of incentivising local authorities and communities to enable more homes to be built in their areas. We welcome the detail published today, but this alone is no silver bullet and more action is needed.”

BuilderScrap sourced this article from Building.co.uk

A survey in January of construction buyers showed that construction had began to recover, this was used by the Government as a sign of broader economic recovery. Buyers may be seeing an improvement after the dreadful weather in December but Glenigans has reported that this improvement is not seen on site with every sector and region seeing a fall of some kind that that of a year ago.

Even taking into account the bitter weather we suffered Glenigan’s three-month trend figures make dismal reading. Construction projects that started in November to January fell by 28% compared to the same period a year ago.

Yorkshire and Humberside had the largest regional fall regarding value of new work starting on site was almost 50% less than that of a year ago. Scotland, Northern Ireland and the North West of England were all down a third, while the East of England got off lightly with a marginal 3% fall.

James Abraham, Glenigan economist, said:”The fall in project starts is largely due to the severe December weather. However, while the industry has made up some of the lost ground over the last month, January starts were still much weaker than a year ago.”

Residential projects plunged 39%, with private housing crashing by 47% and social housing down 27%.

“Whilst house builders deferred project starts in recent months in response to poor weather and weak consumer confidence, Glenigan expect private housing developments to return to growth by the end of 2011. In contrast social housing will remain subdued due to Government cuts” said Abraham.

Non-residential project starts also suffered being down by almost 25%.

“Retail construction starts halved, having been an industry bright spot throughout 2010.”

“Hotel and leisure construction starts fell by a third in the three months to January after defying the harsh December weather to register growth in Q4 of 2010,” said Abraham.

There was good news as Glenigan forecasts that non-residential construction will grow over the second half of the year as falling vacancy rates and increasing rental values lift office and industrial construction, offsetting a weakening in government funded areas such as health and education.

Civil engineering project starts were 22 % down compared to a year ago with utilities projects starts now declining faster than infrastructure. Although this is likely to be a short lived hiatus as regulated utilities and energy projects gain momentum.

BuilderScrap sourced this article from Construction Enquirer.

Morris Homes will build 344 eco homes in the first phase of a long-standing vision to regenerate the South Bank of Peterborough’s River Nene.

The projects aim is to show the entire building industry how huge reductions in carbon emissions can be achieved by using improved design and advanced construction technologies.

Martin Edmunds from Morris Homes said: “We are in the enviable position of being able to create something truly visionary. We believe our proposals fulfil the carbon challenge criteria in an exciting way.”

Morris Homes has worked with sustainable architecture specialist Browne Smith Baker after it was selected as the preferred developer following a national competition as part of the Carbon Challenge programme.

The development will be built to Level 6 of the Government’s Code for Sustainable Homes, and include, a sustainable urban drainage system and carbon zero energy generation alongside retail and community facilities.

The sustainable development will provide a mixture of 63 two-bedroom, 90 three-bedroom and 68 four-bedroom houses plus 74 two-bedroom apartments in a seven-storey block. The apartment block, complete with a grass roof and green walling, will sit above a 3,000 sq ft food store.

Building the social homes elements has allowed the plan to benefit from a £7.8m grant from the Homes and Community Agency (HCA).

Terry Fuller, executive director for the HCA in the East and South East, said: “This is great news for Peterborough and the industry.”

“The ‘zero carbon’ status aims to create new homes and places that are appealing, attractive and point the way to how we could all live in the future.”

“The industry has to respond to climate change and planning approval on this development enables fast-track delivery of more zero carbon homes in England.”

The HCA’s Carbon Challenge programme challenges designers and house-builders to show how Level 6 of the Code can be delivered.

The first Carbon Challenge demonstration development is being constructed at the site of a former hospital at Hanham Hall, South Gloucestershire.

BuilderScrap sourced this from Construction Enquirer.

There were positive signs for the construction sector as there was an increase in activity across the entire sector; this is the first time this has happened since last August, this is according to the latest monthly Purchasing Managers’ Index from the Chartered Institute of Purchasing Supply (CIPS).

The index, compiled by research firm Markit, rose to 53.7, up from 49.1 in December, on a scale where any figure over 50 marks growth.

The weather conditions at the start of the year helped to boost construction work, while there were also gains in new business, CIPS said. Despite rises in both new orders and activity unfortunately employment nonetheless fell again.

Civil engineering was the biggest benefactor, having seen a slight reduction in activity during December. Commercial based construction activity meanwhile extended its sequence of growth to eleven months. There was a slight increase of house building in January to end a four-month period of contraction.

Optimism regarding companies’ activity levels in 12 months time rose to an eight-month high, and has improved substantially since hitting a low last September.

David Noble, chief executive at CIPS, said: “This is good news for the Government as the construction sector seems to have bounced back, suggesting it was the widespread chaos caused by the snow that had such an impact and hampered growth in December.”

But despite the growth of activity, an “air of caution” persists amongst construction companies as employment levels continue to fall, Noble warned.

“Some companies that are doing well are hiring but many more companies are continuing to adjust to lower workloads and deferral of projects,” he said. “Until growth becomes sustained it is unlikely we will see employment levels rise substantially and consistently.”

Source: Buiding.co.uk 2/2/2011

The future of the Construction Industry looks bleak after research by analysts Hewes and Associates suggested the industry would not return to growth until 2014.

The prediction came as GDP figures from the Office of National Statistics show construction output fell 3.3% in Q4 of 2010, the largest drop since the height of the recession in early 2009.

The construction figures dragged down overall GDP, which fell 0.5% in the last quarter of 2010.

Hewes also published a downbeat outlook for the sector for the next three years in which they have said forecast output will fall 3.5% in 2011 and drop a further 5% in 2012.

This compares with Experian’s forecast earlier this month of a 3.6% drop for 2011 and a 0.4% contraction for 2012.

Hewes also expects a marginal contraction of 1.3% in 2013, whereas Experian expects a return to growth of 5%.

Government cuts will bring an end to the construction recovery, the report said, after public spending contributed 65% of the growth in 2010, and the sector will contract for a second period.

Noble Francis, economics director at the Construction Products Association, said: “The GDP figures are really not good.”

“This is particularly concerning because the effects of the public sector cuts aren’t hitting the construction sector yet.”

Alasdair Reisner, head of industry affairs at the Civil Engineering Contractors Association, said: “The weather [in December] has clearly had an impact but if there was underlying strength in the construction sector then the figures wouldn’t have been as bad.”

This article has been sourced using Building.co.uk.

The latest survey conducted by the Federation of Master Builders (FMB) has indicated that small to medium sized enterprises in the construction sector are set for a fourth year workload reductions.

Respondents of the survey indicated a third of companies expect to make further cuts to staffing levels as a result of the increase of VAT. It is claimed this could account for an estimated 7500 construction jobs.

The survey showed that the final quarter of 2010 was the 12th consecutive quarter where the net balance of workload growth showed as negative. This means that the SME construction sector has seen three consecutive years of reduced workloads. Expectations indicate that this is a trend that looks set to continue into 2011 with workloads expected to reduce again. Workloads have remained negative in all sectors with the exception of the social new build housing sector.

The FMB director-general Richard Diment warned that the construction sector has still not seen the worst of the recession. He went on to say “Cuts in government expenditure are making matters worse with more than half of building companies reporting falling levels of work in public repair and maintenance work. Our survey shows a sharp increase in those expecting workloads to contract once again in the first quarter of 2011.”

“The government is pinning its hopes of economic recovery on the creation of new jobs in the private sector but its policies are having exactly the opposite effect in the building sector. The increase in the rate of VAT earlier this month will cost the construction sector nearly 7,500 jobs this year alone. Cuts in public sector spending on social housing are having a particularly adverse impact with nearly half of building companies reporting that work in this sector had fallen.

“The construction sector has the potential to build Britain out of recession and we know that for every £1 spent on construction output generates a total of £2.84 in total economic activity. If this could be coupled with expenditure on infrastructure projects as well as tackling the growing housing crisis the government would be building the real foundations for a sustained economic recovery.”

Source: The Construction Index (24/01/2011)