A nip in the air

After a busy summer, the rate of activity growth slowed in September, as shown in a three-point fall in the activity index to 56.

An autumnal decline also befell the orders index, which dropped four points to 67 and the tender enquiries index, which one point to 57. Civil engineering is experiencing a much higher level of tender enquiries than residential and non-residential construction.

Firms’ optimism regarding short-term employment prospects flagged noticeably, with the index falling five points in September to stand at 53. Optimism concerning tender prices has also lessened, although it remains high; a fall of four points left it at 66.

On the regional front, the only increase in growth was in Wales and a fall in orders was evident across the UK.

CFR’s Leading Construction Activity Indicator, which provides a short-term forecast of activity levels, indicates continuing but declining growth over the next three months.

According to Experian’s latest regional construction research, the performance of the UK improved during 2003, with gross value added (GVA) rising 1.9%.

The outlook for the forecast period is for this growth to continue. New construction continued to perform well in the first half of 2004, with an increase in current prices of 22% against the first half of 2003. The forecast for output growth also remains relatively strong, with 13% predicted for 2004, 10% for 2005 and 7% for 2006.