Uncertainty rules construction agenda

Rising temperatures in early spring are great for lifting the spirits and offer a mildly pleasant diversion from the uncertainty we all face, not only in the building sector but politically too, with an intriguing election only four weeks away. Peter Andrews, Agent for Greater London, Bank of England highlighted at a recent CPA Council lunch that the main area of concern was for a hung parliament because of the delays this could bring to decisions to progress major construction projects.

Delays though are only one aspect of uncertainty and I think that it is interesting to see what the supply chain think about future issues. At a recent Regional Main Contractors Event an audience of 200 were invited to respond instantly by electronic means to various topical issues. A key question related to what the audience would think would happen to prices over the next 12 months. Given set options:

20% voted for an increase of between 0%-5%
60% voted for no change
20% voted for a reduction of between 0%- 5%

Asked about who would win the election and separately which Party would be best for business the results for each were, as some might expect with dependency on public sector expenditure, very different.

A recent CPA Activity Barometer highlights that construction product manufacturing sales were broadly flat during the first quarter of 2010 compared to one year earlier. While manufacturers also anticipated that sales in the second quarter of 2010 would be slightly higher than a year earlier it is a concern that private sector construction fell 20% during 2009 and is expected to fall a further 5% during 2010. With the construction sector accounting for 9% of GDP it is quite clear the impact on the economy as a whole of significant falls in public spending.

Not for a long time perhaps has our sector so eagerly awaited the real rather than proposed construction agenda of the next government.

For details of CAB’s 2010 Events programme including our Annual Technical Conference on 13 May at Stratford Manor Hotel, Warwickshire please contact the CAB office on 01453 828851 or email Julie Harley at julie.harley@c-a-b.org.uk