House prices flatline in a fragile market, but what does this mean for construction?

House prices flatline in a fragile market, but what does this mean for construction?

As the various house price indicies trickle in with their indications of what happened to house prices and the housing market in February one thing remains certain – you’d be foolish to draw too many conclusions from them about the likely path ahead. Analysis of the December, January and February data has been clouded by the big freeze in December. And there remains considerable uncertainty over how much the big squeeze from public sector spending cuts has already hit demand…

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Worrying new orders figures, despite 18% quarterly jump

Worrying new orders figures, despite 18% quarterly jump

You wouldn’t expect a sharp rise in new orders for construction to be a cause for concern – not in today’s work-starved economy. But that is just what we have. On the face of it the 18% jump quarter on quarter in the volume of work in the final three months of last year should be a reason to cheer. More work in the pipeline, yippee. And I suppose it is not unreasonable to see it that way. But sadly…

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Plant hire turnover slows

Plant hire turnover slows

The plant hire sector is showing signs of weakening along with the slowdown in growth in construction. The latest Index of Services figures show the lowest level of output from firms renting machinery and equipment since May. The graph above tracks this output on a quarterly basis against construction output. And not surprisingly the correlation is about as close to bang on as one might expect. As an aside, this will provide some comfort for the statisticians at ONS who produce the…

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More inflation worries as plant hire prices bounce back

More inflation worries as plant hire prices bounce back

The latest data from the national statisticians ONS on services producer prices adds more concerns over rising inflation for contractors. The ONS’s services producer price indices provide data on price movements across a range of businesses, including plant hire, that provide services to other businesses. The recession in construction had driven plant hire prices down hard. But now it seems they are bouncing back as is clear from the graph below. Prices in the final quarter of 2010 were 2.2% up on…

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A new-look Middle East: threat or opportunity?

A new-look Middle East: threat or opportunity?

There’s a long way to go before we know what will emerge from the unrest in the Middle East and North Africa. But what seems reasonable to assume is that it will different from the established order of top-down command, in many cases fuelled by oil money. How different things will be, who knows? Naturally it is unwise to rule out the possibility of the emergence of a more autocratic style of Government filling the power vacuums that are now…

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Architectural and engineering firms see drop in turnover in 2010

Architectural and engineering firms see drop in turnover in 2010

The cash brought in by UK based architects and engineers last year dropped by a further 2%, according to the latest official figures on manufacturing and services turnover. This puts turnover down about 8% in cash terms since the peak of 2008. Sadly this data series does not split the work on the basis of domestically generated and overseas generated work. But data from the pink book does suggest that exports account for about 10% of turnover. Given that architectural…

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England sees 102,830 new homes built in 2010 – we built more in 1875

England sees 102,830 new homes built in 2010 – we built more in 1875

Well there we have it. 2010 was another awful year for building new private homes in England with fewer than 81,000 completed, compared with almost 154,000 in the peak year of 2007. And look closer into the latest official house building figures and we see than in many of the English regions, particularly in the North, the level of private house building is now running well below half of what it was in 2007. When you add in the homes…

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A bad time to bank on cutting costs to make up for cut-price bidding

A bad time to bank on cutting costs to make up for cut-price bidding

The latest pan-industry construction trade survey put together by the Construction Product Association paints a bleak picture for the months ahead, as falling workload and prices combine with cost inflation to squeeze firms’ already pressured profits. How ironic that seems after the industry enjoyed one of its best ever years of growth in 2010. But the trade survey suggests that profit margins have been under significant pressure since the credit crunch in the autumn of 2007. And it would seem…

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2010 saw fastest growth since the 1980s boom – but we are on the way down again

2010 saw fastest growth since the 1980s boom – but we are on the way down again

The impact of the economic stimulus on construction is clear when we look at the phenomenal growth the industry enjoyed in 2010. The latest set of construction output figures put volume growth for 2010 at about 6.2%, although the amount of cash pocketed by the industry rose by just 3.8% as a result of falling prices. In volume terms this represents the biggest annual jump in output recorded since the late 1980s boom. And by the time the statisticians at…

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1.2 million more dwellings than households – is that right?

1.2 million more dwellings than households – is that right?

The latest chapter of the Social Trends analysis produced by the statistician’s at ONS covers housing. It pulls together familiar data and will tell the cognoscenti little or nothing they don’t already know. But interestingly you don’t have to pass the first graph before widely held assumptions are challenged. It is taken as fact by the overwhelming proportion of politicians and housing professionals that there is a housing shortage. Well here is Figure 1. Pull the numbers apart and we…

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