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IS CONFIDENCE RETURNING TO THE CONSTRUCTION SECTOR?
By Tom Parlon, CIF Director General
Earlier this week, the Construction Industry Federation (CIF) released our latest Construction Confidence Index. This was the results of a survey conducted amongst our membership, with 393 members participating.
There were some very positive results in that survey. For example more than half of those who completed the survey expect their business to grow during the course of 2014. This is good news and marks a substantial shift in the mood within the construction industry.
What is also noticeable however was that 26% do not expect to see their business grow. That’s a substantial segment of the audience and illustrates that more than one in four are not expecting growth this year.
Another of the survey questions also illustrated this point. In this question we asked our members whether their company’s level of activity had grown compared to this time last year. Almost 43% were able to provide a positive response. But the number of people who said their business activity had decreased over the course of the last 12 months was very high. When you see almost 3 out of 10 respondents say that business activity had dropped then that is deeply concerning.
Similar figures were returned in the question for tenders. Again there were a large number who have seen an increase in tendering activity. However for more than one in four the number of tenders has dropped. All this highlights that not only is work on the ground not on the increase, but the potential for work is also falling away for certain portions of the industry.
While everyone in the construction industry is delighted to see an increase in activity, what this survey highlights is that the growth is not being evenly felt across the board. This tallies with the word on the ground. There are several members who have actively expressed their view that there is no sign of a recovery in their local area. This seems to be the case in many of the less urban areas around the country.
The problem is not just on a regional basis though. Several sectors across the industry are yet to see any real bump in activity. Take civil engineering for example. We have seen civil engineering activity fall dramatically over recent years in correlation with the drop in capital spending.
All this emphasises the importance of the Government’s new strategy document for the construction sector, Construction 2020. We need to ensure that all the industry starts to grow again – across all regions and all sectors. Only when steps are taken to ensure that the sector returns to growth across the board, will we be able to return to a sustainable level of construction activity. A level that is good for the industry and good for the wider economy.
(If you’d like to see the rest of the survey, please click on the image below.)