Falling demand and rising costs hit manufacturers' confidence

Falling demand and rising costs hit the construction industry hard during the third quarter of 2011, dramatically affecting manufacturers’ confidence, the latest Construction Trade Survey has shown.

The Construction Products Association found that 44% of heavy side firms now expect sales to fall next year, compared to just 14% three months earlier. The percentage of light side manufacturers which foresee growth in 2012 also dropped.

Small and medium building firms reported that workload had declined for the 15^th consecutive quarter, which is significant given that 70% of the industry’s output is generated by firms employing fewer than 299 people.

Cash flow emerged as a widespread concern, with only 2% of specialist contractors having received payment within 30 days in Q3.

Speaking about the survey Stephen Ratcliffe, director of the UK Contractors Group (UKCG) said: “Providing certainty over the pipeline of forward public sector programmes and working with the industry to get shovel-ready projects underway, would be the most helpful thing government could do in the wake of these results. That is certainly a message that has been picked up by the Prime Minister and the Chancellor and UKCG hopes there will be more positive news for the industry in the wake of the autumn statement.”