The Construction Trade Association (CPA) has released its Construction Trade Survey for the first quarter of the year, which highlights a mixed performance in the industry’s supply chain at the start of 2018.
It has been an uncertain start to the year for the UK’s construction supply chain; the liquidation of Carillion has had far-reaching ramifications for smaller businesses. Some of these have been left without payment after completing work for the stricken company.
Elsewhere, the weather disruption forced many construction sites to close for days, causing delays that have impacted productivity, output and the economy.
And the Construction Trade Survey shows that, while main contractors and SME builders reported an increase in activity in the first quarter of 2018, the proportion of firms reporting a rise was smaller.
Elsewhere in the UK supply chain, civil engineering firms recorded a fall in workloads for the second quarter in succession.
Much more worrying is the plight of heavy side product manufacturers and their sales, which are a trusted indicator of structural and groundworks. Sales fell for the first time in five years.
In more positive news, over 25% of respondents are optimistic about the future, with orders, enquiries and product sales for the year expected to remain positive.
Rebecca Larkin is the Senior Economist at the CPA. She highlighted the reasons for the quarter’s performance in the supply chain, and emphasised the importance of housing and infrastructure on wider industry performance.
She said: “The industry’s run of growth was halted by a quarter that combined the liquidation of Carillion and the snow disruption in February and March.
“Encouragingly, order books throughout the supply chain suggest activity will pick up again throughout the year. This appears to be driven by just two sectors, housing and infrastructure, which are reliant on a ‘steady state’ of government support.
“Private sector house building continues to benefit from Help to Buy, housing associations are commencing activity under affordable homes funding programmes, and contract awards for major strategic infrastructure projects such as HS2 are lining up a pipeline of longer term infrastructure activity.”