Monday 14 December 2009

Public spending limits sharp downturn in construction according to Construction Products Association

The latest ONS figures for construction output highlight the critical importance of public spending to the industry. Although total construction output rose 2% during the third quarter of 2009 compared to the previous quarter, this was primarily due to growth in public spending offsetting the continuing sharp falls in private sector construction. Taking the first nine months of 2009 as a whole, construction output is 12% lower than the same period in 2008.

Commenting on the figures, Noble Francis, Economics Director of the Construction Products Association said "These latest output figures illustrate that given the dramatic fall in private sector work, it is more important than ever that government maintains its capital investment programme in housing provision, transport, education and health facilities to provide better infrastructure and ensure a skilled workforce for economic recovery.

In addition, the recent independent study by LEK Consulting highlights the benefits of investment in construction to the UK economy, with every £1 speant on constrution generating £2.84 in economic activity. We hope that the Chancellor recognises this and highlights the importance of capital investment in constructyion in next week's Pre Budget Report".

The main growth in public capital spending was:
  • Public housing where output was 14% higher in Q3 than in the previous quarter
  • Work on schools, hospitals and the Olympics, which was 7% higher than in Q2 and 31% higher than in Q3 of 2008
  • Work on the railway network which was 14% higher than a year ago, whilst construction output on roads was 19% higher.

In contrast, private sector construction activity continued to fall sharply:

  • Output on industrial projects fell 35% compared with the third quarter of last year
  • Commercial activity (offices and retail) fell 29% over the same period
  • Output on private housing was still 12% lower than the previous quarter, although there are now signs of a slow recovery in this sector.

Reflecting on the prospects going forward, Francis said;

"With continued falls in the new orders figures across the private sector any recovery in the construction industry over the next 12 months depends critically on the government sustaining its current spending plans, and this will be a key part of the discussions we have with all the political parties in the run up to next year's Election."

For more informaton on the Construction Products Association, please click here.

Tuesday 3 November 2009

End of recession won't end hard times

In the past few weeks, the dark veil of recession has shown signs of lifting. France, Germany and,more recently, China have seen their economies enjoy a sufficiently sustained period of growth, albeit negligible, that has lasted long enough for economists to declare them officially “out of recession”.

Closer to home, mortgage lending is on the rise again at long last and even house builders, among
the worst hit by first blows of the credit crunch onslaught, are reporting a slight upturn.

Together with some more positive news about consumer spending, these statistics have brought a slight flush to the cheeks of the lifeless corpse that is the world economy.

But we’re not out of the woods yet. In fact, I am concerned that even when we do crawl out of the recessionary chasm that swallowed us some 12 months ago, the struggle is far from over for the demolition industry.

The first hurdle the industry is likely to encounter is a hangover of thinner margins. Main
contractors and developers have “enjoyed” a period of intense competition among demolition
contractors which has led to some near-suicidal pricing practices. Having grown familiar with that level of cost, these developers and contractors are not suddenly going to accept a post-recession price hike. Indeed, I would personally be amazed if the “value engineering” built into virtually every contract these days does not continue long after we’ve shaken the recessionary monkey off our collective backs.

The second and, perhaps, bigger challenge is in planning. With the notable exception of certain
Government-funded departments, new build and its associated planning has all but dried up in
recent months. Even when the supposedly wise heads in Government sound the “alert over” sirens and the world returns to some semblance of normality, demolition contractors will find their workload wedged behind a logjam of planning applications held over from the dark days.

Both of these problems are beyond our control and, as usual, we will just have to make the best of a bad job. We’ll have to do the same with equipment fleet renewals, expansions and maintenance programmes that have been undermined by the current recession.

Governments around the world have climbed aboard the stimulus package bandwagon, injecting
trillions of tax dollars into comatose economies; but that has failed to change the attitude of most
banks and finance houses that would still rather see those dollars on their own bottom lines than on ours. As a result, even those demolition companies that have managed to maintain a good
workload through the recession have found themselves blocked at every turn when they set out to buy new or replacement equipment.

And can we all, hand on heart, say that we’ve invested as much on machine maintenance during the recession as we might have during a boom period?

To read more articles from Demolition News, click here

Friday 30 October 2009

Health and Safety Executive issues details of accidents and fatalities for 2008/09.

First the good news. The number of people killed or injured at work in the UK during 2008/09 shows a marked decline on previous years.


But before we all head for the pub for a celebratory (yet safe) drink, here’s the bad news. Construction accounted for more than a third of all work-related deaths, 53 in all.


Now as someone whose primary interest is demolition, it would be nice to sit back and smile smugly at the fact that my sector has a far better safety record; and that the demolition industry’s adoption of mechanization and improved methods have largely consigned accidents and fatalities to the history books.


Sadly, due to what is either a quirk of statistics or a concerted effort to up construction’s average, the accident and fatality stats for demolition remain inexplicably mired within the construction figures. So while figures from the National Federation of Demolition Contractors membership continue to show a marked decline in both reportable accidents and fatalities, the general public continues to believe that all hard hat-wearing workers share the same reduced-life-expectancy-cum-death-wish.


The fact is that demolition remains a hazardous industry in which to work, and dangers and risks are ever present.


However, thanks to a concerted and ongoing training offensive, the sensible use of equipment and the development and adoption of ever-better work practices, it continues to set an example to its cousins in the construction industry.

For more industry news from Demolition News, click here.