Financial turmoil worsens industry outlook

The outlook for the construction industry has worsened in light of this week’s financial turmoil, the Construction Products Association said this week.

The last CPA forecast was published at the beginning of July with the next due in early-to mid-October.

However, its economics director Noble Francis told Building that this week’s 15% nosedive in the FTSE 100 index and the downgrading of the United States’ AAA rating, by ratings agency S&P, had added to growing economic pessimism.

The comments follow this week’s downgrading of the Bank of England’s UK growth estimates.

“There has been increasing pessimism over the past six to eight weeks,” he said. “I don’t think the volatility of the stockmarket is the key factor but it adds to the uncertainty and reduces consumer confidence.

“It also means that it is more likely that lending from financial institutions will not improve.”

“There is data suggesting that things were slowing down in the second quarter,” he said.

There was slightly better news for civil engineers as the Civil Engineering Contractors Association (CECA) announced there were signs of a stabilisation of workloads.

The figures, collected as part of the second quarterly edition of the CECA Workload Trends Survey 2011, showed that civils contractors experienced a 9% decline in workload in the three months to June 2011 compared with the same period in 2010.

This was against a 27% decline for the previous quarter. The CECA also said it had seen other signs of improvement in the sector.

CECA director of external affairs Alasdair Reisner said: “Optimism is in short supply but these figures do offer some hope that a return to growth may be on the cards in the next quarter.”