Trade survey indicates sector ’has not reached bottom’ of recession

Workloads continue to fall and the outlook for early 2011 is increasingly gloomy, according to the latest trade survey for the final quarter of 2010 from the latest Federation of Master Builders.

The balance for workload - the percentage of respondents saying work had increased, minus those who said it had decreased - in the final quarter fell 13 percentage points to -16.

Public R&M work was particularly badly hit, falling to -41 as public sector cuts begin to take effect.

Expectations for future workloads fell even more sharply than workloads themselves. The balance fell 25 points to -31, the lowest it has been since the beginning of 2009. Those surveyed feared most for social new build, which had a balance of -44.

Combining figures for workload, expected workload and enquiries, every region in the UK now has a negative balance - including previously positive London and Eastern regions, down to -8 and -12 respectively.

The survey was based on around 400 FMB members, who mostly have businesses with annual turnovers of between £100,000 and £250,000.

Richard Diment, director general of the FMB, said: “The construction sector has still not reached the bottom of the most savage recession for the industry in living memory. Cuts in government expenditure are making matters worse with more than half of building companies reporting falling levels of work in public repair and maintenance work. Our survey shows a sharp increase in those expecting workloads to contract once again in the first quarter of 2011.  

“The government is pinning its hopes of economic recovery on the creation of new jobs in the private sector but its policies are having exactly the opposite effect in the building sector. The increase in the rate of VAT earlier this month will cost the construction sector nearly 7,500 jobs this year alone. Cuts in public sector spending on social housing are having a particularly adverse impact with nearly half of building companies reporting that work in this sector had fallen,” he said. 

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