Tracker: December 2013

01/ State of play

Experian’s construction activity index stood at 50 in December, a fall of nine-points on the previous month, and the lowest value for twelve months. On a sector-by-sector basis activity fell across the board, the civil engineering and residential sector fell by 9 points and ten points respectively, although both remained over the no-change mark. However the non-residential sector was less fortunate, seeing its index dip to 49, the lowest value for nine months.

The orders index climbed 6 points to reach 64 in December; this was the ninth consecutive month of above average orders. In contrast the tender enquiries index dropped to 47 from 61.

The percentage of respondents indicating that they were experiencing no constraints on activity fell to 27%. The proportion indicating that insufficient demand was restricting activity decreased to 36%, the lowest proportion reported in four years. However, insufficient demand remains the most significant constraint to activity. Labour shortages became a more prominent factor in December at 7%, which was more than double November’s figure, although the proportion indicating that financial concerns were hampering activity remained at 15%. Bad weather became an increased worry to firms, as 11% of respondents indicated it as a concerning factor, in light of increasingly unsettled weather. Material/equipment shortages became less of a concern as 1% of respondents felt it was affecting their activity levels.

For the past 3 months the employment prospects index has remained just below the no-change threshold of 50. In December the index edged up by one point to 49.

The tender prices index fell to 50 in December, down 10 points on the previous month and the lowest index since March earlier this year.

02/ Leading construction activity indicator

CFR’s Leading Construction Activity Indicator fell nine points to 50 in December, the lowest figure in just over a year. The index is expected to fall a further 4 points this month, taking it below the no change threshold of 50.
The indicator uses a base level of 50: an index above that level indicates an increase in activity, below that level a decrease.

03/ Work in hand

In December, the majority of firms across all three sectors reported having less than three months work-in-hand.

The largest change was observed in the residential sector; as those businesses indicating that they had between three and six months work-in-hand fell by 7% to 14%.

Those firms indicating that they had over six months work-in-hand in the non-residential sector increased by
6% to 24%. While the percentage reporting they had between three months and six months work-in-hand decreased by 6% to 24%.

04/ Regional perspectives

Six of the eleven regions and devolved countries saw a decrease in their indices. Scotland saw the largest contraction as its index fell by 10 points to 44. Elsewhere, the Welsh index contracted by five points to reach 34, while North Ireland’s index declined by two points to 50. The East Midlands (70), East Anglia (55) and South-east (62) all experienced a one point downturn to their respective indices.

The largest uptick was seen by Yorkshire and Humberside, and the South-west. Both of their indices climbed a prominent 11 points to reach 103 and 66 respectively. Accordingly Yorkshire and Humberside recorded the highest index seen by any region since the survey began.

The West Midlands experienced an uptick of six points to its index to reach 54 while the North-west’s index increased to 58, up five points on the previous month.

As a whole the UK index, which includes firms working in five or more regions, remained unchanged from November at 57.