The latest employment figures for construction don’t tell us a huge amount about job prospects in the industry other than things seem to be getting worse. But we knew that. Overall employment in the second quarter of this year was 1.1% down on a year ago and is about 15% down on the same quarter five years ago, just before the credit crunch.
One thing guaranteed to pull the trigger for even a half-awake journalist is an upbeat spin put on what looks like really duff news. The normal reaction is: “God, things must be bad.” So the “Wet weather fails to deter buyers” headline on the press release for the RICS Housing Market Survey immediately had me worried.
There will be some people expelling phews of relief at seeing construction output for the second quarter revised up by the Office for National Statistics from a dramatic drop of 5.2% to a less frightful fall of 3.9%. Certainly this will have the effect, all other things being equal, of lifting the rather shocking GDP drop of 0.7% by 0.1% or so. Not much, but a little.
Today’s estimated second quarter fall in construction output of 5.2% presented in the GDP data has caused quite a ripple of shock. Should it?
The consensus among UK’s top construction forecasters is that things are worse than we thought. A week ago we saw Experian and Leading Edge downgrade their forecasts for construction growth. This week we see the Construction Products Association do the same and Hewes & Associates will follow suit when it is published shortly.
The RIBA future trends survey index took a hit in June falling from 13 to 2. This finding that architects are less optimistic about prospects is pretty much in line with what looks like a coordinated decline in optimism across the construction supply chain.
The Government’s intervention to boost infrastructure spending is timely. The construction data is almost all pointing in a southerly direction. The latest construction activity survey from the surveyors’ body RICS, released today, suggests workload among its members shrank in the second quarter.
The latest batch of industry forecasts are emerging and they show construction locked in a deeper recession than previous expected. The recovery now looks further away. Top graph shows how the industry appears to be facing a pretty deep and protracted second recession.
The latest construction output figures suggest the decline is the industry is gathering pace.
Most of the recently released housing indicators suggest the market is going through a boggy patch and today’s survey from the surveyors’ body RICS seems to add support to that view.