Rain Stops Play – and It’s Not Helping the Construction Industry Much

The Office for National Statistics has just released its figures for construction output for the 2nd quarter of 2012 showing a fall of 3.9 per cent.  The original estimate was in fact higher at 5.2 per cent, but final figures comparing the first and second quarters still show a significant drop in output.  A number of factors are affecting the industry with large cuts in public spending being the focus of many construction companies’ complaints, but a number of leading firms have also stated that the record breaking poor weather this year has played its part.

Postponement or Downturn?

Travis Perkins chief, Geoff Cooper, stated in late July that the poor weather conditions have certainly had a significant impact on many firms and suggested that the weather has been partly responsible for inhibiting activity on many projects resulting in the poor figures compared to the previous quarter.  Cooper’s claims were backed up by Marshall’s – a major manufacturer of block paving –  who estimated that the conditions have caused a £10 million drop in sales.  If the weather is indeed to blame for some of the drop in output, the fall may not be as negative as it seems at first hand and may, as Cooper indicates, represent a postponement in construction activity as opposed to a genuine fall.

Public Cuts

In addition to the poor weather the completion of the Olympic building projects may have contributed to a perceived fall in output, but this is not the only public project that has now ended.  Local authorities and public bodies around the UK have been keenly focussed on cutting costs and one area that has been receiving close attention is construction costs.  The majority of authorities are looking to cut back or cancel contracts in the next year although many are trying to work with construction firms to look at methods of cutting the costs of projects rather than mothballing them.

Maintenance and Minor Works

Closer examination of the figures also indicates that the construction industry is being hit hard by the cuts imposed by government bodies.  The largest decline in output was in the new infrastructure sector, at 8.6 per cent.  This has led to calls from a number of construction industry bodies, including the Civil Engineering Contractors Association, for the government to rethink its infrastructure and building policies.  Alasdair Reisner, external affairs director for the association, has called for the government to release new maintenance and minor projects to boost the workflow for the industry.

Mission Impossible?

The chancellor is faced with a difficult task.  The economy as a whole has not performed as well as hoped in 2012.  This year was expected to be the start of a steady recovery but, in fact, the government’s own figures show that the best description for the economy is ‘stagnant’.  While spending cuts are essential to the UK’s recovery, the construction industry is equally vital.  Every pound spent in the construction industry returns almost three into the wider economy and along with infrastructure the availability of new, desperately needed housing, is seen by many as the only way in which the recovery will be kick started.

Building for Britain

While it’s true that poor weather and the recent end to the construction of the Olympic Park and venues may have impacted on the poor output figures for the second quarter, it is to be hoped that the government and other organisations do not continue to hide behind Britain’s summer storm clouds and find new, innovative ways to help the construction industry to assist the wider recovery in the UK.

concrete pump

Photo Credits: http://www.flickr.com/photos/osde-info/3234152938/

While the weather may be partly to blame for the continue downturn in the construction industry, everyone from concrete pump suppliers to housing developers will be looking for further investment from both local and national government to brighten the building horizon.

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