Archive for the ‘Construction workload’ Category

UK Lighting market flickers, but remains bright

Friday, March 26th, 2010

A report by AMA Research estimates that the UK market for lighting was worth around £1.4 billion at manufacturers selling prices in 2009. Being a mature market, it mostly relies on replacement purchases which, generally, results in moderate growth or decline in line with the economy. However, the recession saw a market decline of 10% in 2009, and is forecast to fall a further 4% in 2010.

This will result in the lighting market struggling somewhat in the short term, but trading conditions in the longer term still remain positive.

In 2009, the lighting market was dominated by sales of luminaires, which accounted for 67% of the market, with lamps accounting for a further 26% and lighting controls the remaining 7%, although in the long term it is expected that lighting controls will gain share.

Growing sectors in the lighting market include LEDs, which represent a growing threat to more traditional products. Product development in LEDs will continue to offer this sector greater differentiation and it is expected that this will result in an increased market share in the medium to long-term.

Energy efficiency also continues to grow in importance, driven by legislative changes and increasing fuel bills. The government remains committed to promoting the use of energy efficient products, promoting use within public sector projects and through the introduction of energy conservation and monitoring legislation. Indeed, AMA has undertaken a more detailed study into the energy efficient lighting products market which has remained bouyant as a result of legislation, public information campaigns, and a high level of subsidisation (particularly in the domestic sector) which has largely offset the general economic decline and slowdown in housebuilding and construction activity.

The market for energy efficient lighting comprises lamps or bulbs, luminaires and lighting controls, and in 2009 it accounted for 36%, in value terms, of the greater UK lighting market, up from just 21% in 2005.

Some of the most notable trends in the sector include energy efficient lamps being designed to fit most standard luminaires, and growth in the luminaires and controls sector is therefore increasingly mirroring growth in the lamps sector – a trend likely to become even more noticeable as technology advances even further.

The value of the UK energy efficient lighting market is expected to reach £969 million in 2014, and the rate of growth – which slowed down slightly in 2009 – is expected to remain buoyant.
Given the projected decline in the use of non-energy efficient lighting solutions, largely as a result of legislation, AMA Research expects that the share of energy efficient lighting in the overall UK lighting market – 36% in 2009 – will reach 63% by 2014.

Copies of AMA Research’s “Energy Efficient Lighting Products Market – UK 2010-2014” and “Lighting Market – UK 2010-2014” reports are available from www.amaresearch.co.uk

UK growth to surpass Western EU neighbours in decade to come

Thursday, November 19th, 2009

Growth in the UK’s construction industry over the next decade will be among the strongest in Western Europe, according to a report.

The 10-year forecast from Global Construction Perspectives and Oxford Economics – which was carried out in conjunction with the Royal Institution of Chartered Surveyors – predicts the UK will be the ninth largest construction market in the world in 2020.

The report expects Britain to continue to feel the damaging effects of the global recession going into 2010, with year-on-year growth only returning in 2011.

But the UK will move into the top ten largest construction markets in 2020 – ahead of France and Italy, but behind Germany and Spain – as output recovers more strongly than its Western European neighbours.

Local growth will be led by the recent recovery in the residential property market as the pent up demand for new homes is finally realised, it claims.

According to the report, Eastern Europe will see growth averaging more than 100 per cent over the next decade – led by Poland and Russia.

The emerging markets will rapidly overtake their developed neighbours, with China replacing the US as the world’s largest construction market as early as 2018.

China is expected to have a 19.1 per cent share of global construction by 2020 – worth almost £1.45 trillion.

The report – entitled Global Construction 2020 – predicts that in 10 years Nigeria, Vietnam and Turkey will be among those experiencing the highest growth levels, alongside booming markets such as India, China and Brazil.

Global Construction Perspectives spokesman Mike Betts said the UK construction industry should be positive about the next decade.

He said: “The UK’s construction market has suffered during the recession but will recover stronger than many of its Western European neighbours from 2011.”

The report predicts that today’s global construction market is worth an estimated £7.5 trillion – representing 13.4 per cent of global GDP.

But by 2020 construction will be a £12.7 trillion global market and is forecast to account for 14.6 per cent of GDP.

Housebuilders restart on sites as stock sells quicker than expected

Thursday, July 16th, 2009

Housebuilders are starting construction again, but it will do little to increase historically low levels of output this year.

While several of the major housebuilders released positive trading updates last week – in which they confirmed they would once again start work on new sites – the build programmes are unlikely to push output beyond forecasts of 70,000 new homes in 2009, serving only to replenish dwindling stock levels.

Barratt told shareholders it had 822 unreserved stock units at 30 June, which equates to just less than four weeks’ supply at current sales rates. The figure is down 55 per cent from its 1,821 units at 30 June, 2008.

Bovis Homes has 480 finished homes left, just over half the 754 homes it sold in the six months to 30 June, and well down on the 1,000 it had at the beginning of the year.

Galliford Try has just 80 completed stock units left to sell, compared to 280 a year ago.

And Persimmon said it has 390 sites with stock remaining compared to 460 this time last year. The firm said it now plans to start work on a further 50 new developments over the next six months.

MF Global house building analyst Andrew Gardner said: “The housebuilders have perhaps run down stocks a little quicker than expected.”

But Home Builders Federation director of external affairs, John Slaughter, said he still expected the 2009/10 financial year to be a low point in terms of homes built.

Panmure Gordon analyst Rachael Waring said: “This is a very key point in time for the housebuilders.

“They have got to carefully manage how many new sites they start with the demand for homes. They do not want to find themselves back at the banks in six months’ time looking to borrow more money.”

The Construction Products Association has upped its forecast for homes built in 2009 to 72,000 from 70,000.

The Association forecasts 2010 will see a further increase in production with 99,000 homes built, but it is still well down on 2007’s 182,000.

Federation of Master Builders:- Builders’ workloads are continuing to fall

Thursday, July 16th, 2009

Builders’ workloads are continuing to fall, dispelling talk of any potential green shoots of recovery.

The latest Federation of Master Builders survey – of 400 small-to-medium construction firms over April, May and June – has found that 49 per cent of builder’s suffered declining workloads for the quarter.

Only 3 per cent reported an increase, with FMB bosses saying the results show that market conditions remain tough and there is no real growth returning to the construction sector as a whole yet.

But, like several other recent indicators, the survey did reveal evidence to suggest the recession in the construction sector may be beginning to bottom out.

The results show a general slowdown in the rate of decline in employment, workload and enquiries in the second quarter of the year. The gap is forecast to narrow further still over the next three months.

FMB director general Richard Diment said: “The survey shows just how far away from green shoots we actually are and there is a massive difference between things getting worse at a slower rate, and things actually getting better.

“Although the rate of decline does seem to be easing and may even be starting to bottom out, we are not out of the woods yet, and it is vitally important that the Government takes urgent steps to pave the way for genuine recovery.”

STILL SKILLS SHORTAGES

Despite continued contraction of construction output and falling staffing levels, there remain skills shortages for a number of trades.

Firms engaged in the survey highlighted they had difficulties recruiting carpenters/joiners, plumbers and HVAC trades and electricians.

The FMB said “it is interesting that there are any problems at all, given the widely reported numbers of job losses”.
Some 40 per cent of FMB builders said they had to reduce staffing levels over the quarter, while 51 per cent reported no change.

CBI: Economic growth will return next year

Tuesday, June 16th, 2009

The UK economy is stabilising with the worst of the quarterly falls in GDP behind us but it will take until the beginning of 2010 before we see a return to growth, CBI Director-General Richard Lambert has announced
The UK’s leading business group expects modest growth to resume during the first three months of 2010, with the pace of growth gradually picking up during next year.The CBI predicts that UK GDP, supported by low interest rates and quantitative easing, should flatten out during the second half of 2009, with quarter-on-quarter figures of -0.1% and 0% in Q3 and Q4, and modest quarter-on-quarter growth of 0.1% and 0.3% in Q1 and Q2 of 2010.

Richard Lambert, CBI Director-General said: “The world recession has deepened, so it is not surprising that the UK economy has continued to suffer. However, the harshest period of the recession looks to be behind us, the economy is stabilising and this should continue during the second half of this year.

“The return to growth is likely to be a slow and gradual one; difficult credit conditions are still affecting business behaviour. For positive growth to return, lenders need to feel more confident so that credit can start flowing again.

“Some commentators have been carried away by recent tentative indicators as evidence of ‘green shoots’. It will take some time before we can be sure these shoots have roots we can depend on for sustainable growth and, in the meantime, the government must do everything it can to help firms get access to credit.”

The CBI expects that, by the end of the recession, the economy will have shrunk by a cumulative 4.8% – not as severe as the 5.9% seen in the early 1980s – after five consecutive quarters of falling GDP.

The CBI expects there to be very slight growth from the start of 2010, with the pace picking up slowly, such that trend growth rates are restored only by the end of the year. For 2010 as a whole, this profile yields an average annual GDP growth of a modest 0.7%. This follows a fall this year in GDP of 3.9%.

CPI inflation is expected to fall below the Bank of England’s target of 2% in 2009 Q3 and remain there throughout the forecast period to the end of 2010. Quantitative easing is expected to continue for some months yet, but by the spring of next year, the Bank is expected to wish to return monetary policy gradually towards a more normal footing, with very modest increases in the official rate of interest from its current 0.5%.

Significantly, the labour market is proving to be even more flexible than hoped, with many more private sector employees accepting wage freezes and short-time working than in previous downturns. This should help limit the pace of job losses through 2009, and the CBI now expects unemployment to peak at a slightly lower level than previously thought. Unemployment is still expected to continue to rise until Q2 2010, to a peak of 3.03 million (9.6%), before edging lower during the remainder of 2010.

Consumer spending will be constrained not only by the rise in unemployment, but also a more elevated savings ratio and only modest increases in incomes. Through 2009 and 2010, the savings ratio is forecast to remain at a similar level to the two-year high of Q4 2008. Meanwhile, average earnings (including bonuses) should continue to fall on a year ago during Q2 and Q3 2009, followed by weak growth from Q4 and into 2010.

As a result, the CBI’s figures show household consumption shrinking by 2.9% in 2009, and growing only modestly in 2010 (0.5%). The weakness of construction investment over the early part of 2009 has led to a modest revision in the outlook for business investment. Business investment is expected to shrink by 12.4% this year, from the -9.3% expected in April, and by a further 1.4% in 2010.

Whereas firms have reduced their stock at a rapid pace at the start of this year, this should now begin to ease and firms should start re-building their stocks next year.

The public finances are expected to be under growing pressure from the recession and net borrowing is expected to reach £172.3 billion in 2009/10 and £182.2 billion in 2010/11, representing 12.2% and 12.6% of GDP respectively.

Ian McCafferty, CBI Chief Economic Adviser, said: “We still have some way to go before the UK economy is truly out of the woods and we see sustainable growth. For consumers, some of the worst fears of earlier in the year may now not be realised, but they will still face tough times as higher saving and lower income eat in to their ability to spend.

“However, the restraint shown by businesses and their staff in setting pay awards and accepting short-time working should help to curb the pace of job losses, lessening the pain for some, and shows the real strength of Britain’s flexible labour market.”

National Institute for Economic and Social Research (NIESR) UK growth reported

Thursday, June 11th, 2009

The UK experienced its first growth in industrial output for more than a year in April, according to official figures released by the National Institute for Economic and Social Research (NIESR).

The economy grew by 0.1% in May and 0.2% in April after contracting 0.5% in March. The NIESR also reported that the output of the UK economy has fallen by 5% between the beginning of the recession in May 2008 and March this year.

Martin Weale, director of NIESR said that the recession had ended “as far as I can tell.” He added, “There has been much less downward momentum than we expected.”

New starts slump 35pc year-on-year up to April 2009

Wednesday, June 10th, 2009

New construction projects starting on site fell by over a third for the three month leading up to April 2009 compared with the same period a year earlier, according to the latest figures from business intelligence firm Glenigan.

New project starts fall 35 per cent on a year ago with non-residential and housing project starts being the worse hit, falling by 39 per cent and 52 per cent respectively.

Across the country the picture was fairly bleak with the north of England experiencing some of the sharpest falls in the value of project starts last year, the Midlands, the east of England, London and the South-east experienced the largest declines during the first quarter.

The decline in residential project starts has been driven by private housing and prospects are forecast to deteriorate over the next two quarters as house builders focus on selling stock and reducing work in progress in the face of worsening UK economic conditions, falling house prices and limited mortgage availability.

However, there is some encouraging news for certain sectors with civil engineering experiencing a rise of 20 per cent in the beginning of 2009 with several road and energy projects starting on site during the first quarter.

The forecast for sector remains positive for the rest of the year, driven by new renewable energy projects and spending on rail and road infrastructure.

Glenigan economics director Allan Wilén said:“Residential construction projects are expected to deteriorate further over the next two quarters, prospects for non-residential projects are mixed and the outlook for civil engineering is expected to be positive throughout 2009.”

Construction output to drop 7.5pc in 2009

Wednesday, June 10th, 2009

Construction output in the UK is projected to fall by 7.5 per cent this year after a decline of 0.2 per cent in 2008, according to the latest forecasts from Experian.

The UK is only predicted to return to modest growth of 1.6 per cent in 2011.

The figures released by Euroconstruct at its Warsaw conference, predict construction output across the 19 countries in the Euroconstruct network to fall by 7.5 per cent this year after a decline of 3 per cent last year.

James Hastings, head of construction futures at Experian,said: “While countries such as Germany were not nearly so exposed to ‘toxic’ debt as the UK, their export-led growth has been badly hit by the decline in world trade, with a consequent knock-on effect on construction activity.”

The decline in activity is predicted to be in double digits in Finland, Ireland, Portugal and Spain, mainly due to the weakness of the housing market in all four countries.

In France, Germany, Italy, and the UK the decline is expected to be more moderate than in Spain, ranging from -3.5 per cent in Germany to -7.5 per cent in Italy and the UK.

Only Switzerland and Poland are forecast to see any increase in activity this year, both driven by civil engineering work and a stable level of activity in the residential sector.

Airport projects

Tuesday, June 9th, 2009

 Below are the current UK Airport projects underway.

The numbers

£9 billion – potential cost of 3rd runway at Heathrow and new terminal

£35 million – Manchester Airport investment in terminal upgrade

2017 – year that Crossrail will link central London to Heathrow

£1.3 billion – estimated cost for Gatwick Airport

235 million – passengers handled by UK airports in 2008

Airport projects

Project Value/£m Airport Contract Stage

Runway and terminal 3000 Heathrow (BAA) Pre-tender
Runway 1400 Stansted (BAA) Pre-tender
Terminal 126.9 Manston Airport Pre-tender
Northwest zone refurb 40 Gatwick (BAA) Costain
Terminal extension 30 Edinburgh (BAA) Balfour Beatty on site
Runway improvements 25 Carlisle Tenders invited
Framework 25 Newquay Cornwall Tenders leading to three framework contractors
Terminal extension 22.5 Leeds Bradford Mace is construction manager
Framework 20 Bristol International Tenders returned
Terminal works 15.5 Heathrow (BAA ) Balfour Beatty on site
Facilities improvements 13.5 Stansted (BAA) Tenders invited from framework
Terminal extension 11.1 Heathrow T4 (BAA) Taylor Woodrow
Terminal development 7.5 Liverpool John Lennon Tenders invited
Car rental centre 7 Edinburgh (BAA ) Kier on site

Note to self

Need to recall how to add tabs in CSS to align text

Business confidence Lloyds TSB indicator – May09

Tuesday, June 9th, 2009

Business confidence in the UK rose for a third consecutive month in May to its highest level in nearly a year, according to the latest Lloyds TSB Business Barometer.

The survey of more than 200 firms found that 44% expect their business activity to increase during the next 12 months, compared with 35% who stated this in April. Only 16% of respondents expect business activity to decrease, down from 21% who thought this in the previous month.

“While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses,” said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.

Homebuyers – May09

Tuesday, June 9th, 2009

New homebuyer enquiries increased for the seventh consecutive month and the net balance of house surveyors reporting falling rather than rising prices narrowed in May to 44%, according to data from the Royal Institute of Chartered Surveyors (RICS).

Although the majority of surveyors are still reporting that house prices are declining, the latest reading of 44% represents the best result since November 2007.

Further evidence that the housing market may have started to recover occurred last week when the Bank of England reported a rise in mortgage approvals in May and Hometrack, a provider of housing information, announced an increase in house sales.

Construction output figures show record fall

Monday, June 8th, 2009

Government construction output figures for the first three months of 2009 highlight the biggest falls on record, the Construction Products Association has warned.

The Office for National Statistics figures show construction output fell an 16 per cent in Q1 2009 compared with the same quarter a year earlier.

The fall is in line with the Construction Products Association’s own forecasts.

The Association’s economics director Noble Francis said: “A large number of jobs have already been lost and there is clearly a lot of pain still to be had.”

Other figures from the report showed that industrial new build fell 40 per cent compared to a year ago and

Output in the commercial sector fell by 26 per cent in the first quarter of 2009 compared to a year earlier.

Over 25 per cent of the sector has been lost in the past year and with new orders in commercial falling 55 per cent in the first quarter of 2009 compared to a year earlier, output will be expected to fall further.

Even in infrastructure, expected to be buoyed by significant workloads in rail, output in the first quarter of 2009 was 5 per cent lower than one year earlier.

RICS: Construction workloads continue to fall

Wednesday, May 27th, 2009

Construction workloads in the first quarter of 2009 continued to weaken the latest construction market survey published by the Royal Institute of Chartered Surveyors today revealed.

Around 45 per cent of surveyors reported a fall in overall workloads for the first three months of 2009 up from a net balance of 47 per cent.

But the housing market has shown an easing in the pace decline.

RICS chief economist Simon Rubinsohn said: This slight easing we are seeing in both public and private housing is broadly in line with the figures coming from the Government on the number of housing starts, which saw a small rise in the first quarter of 2009, and could be aligned to recent signs of a gentle pick-up in the housing market.”

Private commercial and industrial workloads recorded the worst figures with net balances of 57 and 61 respectively. The infrastructure sector’s decline accelerated at the fastest pace in the surveys history.

The outlook for the next year remains ‘downbeat’ with the 46 per cent of surveyors expecting employment levels to fall and 72 per cent surveyors expecting profits to be down over the coming months.

Mr Rubinsohn added: “Despite some sub-sectors showing slightly more positive signs, construction output is likely to post a double digit drop over the course of 2009 with a further loss of employment and skills in the industry.”