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Positive signs in the RICS housing survey – but nothing to get too excited about

Positive signs in the RICS housing survey – but nothing to get too excited about

Recent surveys of the housing market by the surveyors’ body RICS have become increasingly positive in tone and are finding increasing signs of life. There are some promising signs in the findings for house builders and the construction industry. Inevitably the popular focus falls on price changes, with rises seen as a sign of an improving market. Here the RICS found stability taking the nation as a whole and its members were modestly bullish about the prospect of prices rising…

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2012 was the fourth worst on record for construction growth as output falls 8.4%

2012 was the fourth worst on record for construction growth as output falls 8.4%

So there we have it, the official Office for National Statistic figures show that Britain’s construction output fell by 8.4% last year. But how can construction output have collapsed so far so fast and there not be howls of pain and frantic action by the Government to bolster one of the nation’s more vital industries? It’s a puzzle made all the more baffling by the constant appearances on the telly of David Cameron and Nick Clegg in green boots, hi-viz…

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Construction forecasters get more pessimistic – the difference a year makes

Construction forecasters get more pessimistic – the difference a year makes

It’s that time of year when we look at forecasts and wonder just how bad or good the future will be for the construction industry. The top graph shows the latest prognostications and they look pretty miserable in the short term. The forecasters have nudged down their expectations, some lightly, some heavily, which means they now expect things to be worse than when they last forecast. The overall picture they paint is of another year or possibly two of recession…

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Why today’s GDP estimate for construction growth is so worrying

Why today’s GDP estimate for construction growth is so worrying

The estimate for construction growth within the latest GDP figures was truly surprising. We already had two of the three months of data in for the fourth quarter and from that you could build a reasonable case for growth between 2% and (perhaps) 5%. Those unfamiliar with the data might see that as a sign of recovery. It would not have been for many reasons, one – the lag inherent in the monthly survey returns – I will discuss later….

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Optimism rises that 2013 will see more homes sold – that should mean more homes built

Optimism rises that 2013 will see more homes sold – that should mean more homes built

Estate agents are increasingly optimistic that 2013 will see housing transactions rise. That’s encouraging for their books. But if they’re right it’s good news for construction, house builders in particular. Since the late 1970s there’s been a close link between private house completions and overall housing transactions. Roughly, for every ten homes sold one home is built (corrected from first blog) . So the more existing homes are sold the more new homes are built. According to RICS’s latest monthly…

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The construction recession will be deeper – that’s the forecasters latest view

The construction recession will be deeper – that’s the forecasters latest view

The latest industry forecasts for construction activity are, as expected, much gloomier than they were as recently ago as last autumn. Both Experian and the Construction Products Association have trimmed their expectations for growth in construction output for this year and next. Experian is estimating a drop of 8.5% for last year on current data followed by a 3.5% drop this year, while CPA expects a 8.8% for 2012 with a of 2.2% for 2013. The graph (right) shows how these compare…

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Output falls as construction faces worrying time over jobs in 2013

Output falls as construction faces worrying time over jobs in 2013

The latest Office for National Statistics construction output figures fit the pattern of an industry is sharp decline. There was a brief pause for optimism last month as the October data provided a lift. But I cautioned last month about reading too much into one month’s data and, as Noble Francis at the Construction Products Associate suggests, this rise may well have been down to a delayed post-Olympic surge. Such a delayed impact is understandable, as there are lags in the output…

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Why we should be cautious about seeing the RICS survey as a signpost to growth in UK construction

Why we should be cautious about seeing the RICS survey as a signpost to growth in UK construction

The press release headline for today’s RICS construction market survey suggests the industry will turn the corner and grow in 2013. That sounds like encouraging news. Sadly, it is probably over optimistic and probably overstates the results of the survey. Sorry to burst one of the all too few happy bubbles you’ll see this year. But there’s a host of reasons to be cautious over the interpretation of the latest survey. The RICS construction survey provides a useful indication of…

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Latest new orders figures cast a long dark shadow over construction

Latest new orders figures cast a long dark shadow over construction

The construction new orders figures released by the Office for National Statistics on Friday suggest a truly scary year or more for the UK industry. We can find some solace in the general rule that it is unwise to take as your guide just one measure of activity in construction, given the trickiness of measuring the industry’s activity. There are much less worrisome measures of construction activity to be found. But let’s consider what conclusions we might draw if we…

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