Partner Article

Construction activity continues to weaken.

Last month activity in the construction industry continued to weaken, with growth falling 0.9 percent on July.

While data showed that UK construction businesses continued to win new contracts, it was at the lowest level since January suggesting that competition for new business has strengthened.

While confidence was also registered to be at its lowest level for eight months, 34 percent of UK constructors are still anticipating growth in the coming year. Nonetheless, employment levels and subcontractor usage continued to fall in response to either lower workloads or weaker market demand.

Graeme Harker, a partner in local firm Harrow Consulting sees these trends as “massively worrying” and is calling for other consultancy forms to be tougher with clients looking for cheap prices.

He commented: “What we’re seeing is cut throat pricing, and on most of the jobs we’re working on contractors are going in at cost price or less.

“Clients need to understand that they aren’t helping the economy by driving down prices, and are also affecting quality on site.”

Responses to the survey highlight concerns in the construction sector in respect of potential future cuts in public sector spending, but also financial worries within the wider business community.

David Noble, chief executive officer at the Chartered Institute of Purchasing and Supply is now questioning if the sector will be able to maintain growth for much longer

He commented: “Reality is continuing to bite in the UK construction sector, as worries over wider economic conditions contribute to a slower rate of output growth.

“However, the proof of the pudding will be whether the reported increase in competition for new orders, plus increases in fuel and commodity prices, will subdue confidence going for much longer.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .