The increasing delay is almost certain to put back the launch of contracts to market, currently earmarked for April, in a major blow to the fragile confidence to the industy.
UK construction sector activity rose for the 13th month running but the rate of growth is the weakest in four months, according to financial information company Markit. Last month saw growth in all three main construction sectors, for the first time in nine months. But housing and civil engineering have since started to decline, with commercial activity accounting for overall growth in the industry. Despite the slight increase in activity, employment levels across the sector remain unchanged. However, confidence among construction firms about the coming year hit its highest level since May 2011. Sarah Bingham, economist at Markit, said: “This suggests that growth may pick up again in the sector in coming months and will raise hopes that a slide back into recession may yet be avoided.”
There was also good news with the Insolvency Service reporting a slowdown in the number of insolvencies in the sector during this last quarter. Administrations have fallen form 94 in Q3 to 71 Q4 2011 a reduction of nearly 25%.
Mark Wilson, Head of Construction at Baker Tilly Restructuring and Recovery LLP added a word of caution. “There is always a time lag in getting new projects off the ground and therefore the full impact of the delayed economic recovery and he cut in public spending may yet still to be seen.
“There are concerns that government cuts in new build projects have yet to fully bite whilst the industry continues to complete projects already committed to,” he added. His warning come as Construction Enquirer reported that Scottish Cladding Contractor, CDW became the latest industry casualty. Begbies Traynor has been appointed as provisional liquidators after the £7.5m turnover firm ceased trading last week. All 11 staff at the head office of the roofing, cladding and curtain walling specialist have been made redundant.
The news comes as the government faces an increasing backlash from the industry over concerns that it intends to remove BREEAM ratings for schools. Liberal democrat peer Baron Jones of Cheltenham has tabled a question for the government asking how the “decision to abandon” BREEAM will assist its “agenda to become the greenest government ever.” Meanwhile Mark Robinson, chief executive of Scape, a council-backed building procurement body, said the education secretary had an “ulterior motive” for abandoning the environmental regulations for new school buildings, Building Design reported.
Gove was proposing the move to make it easier for free schools to get started, said Robinson. “The whole premise behind a free school is that it can be provided in any building and set out in any way without restriction. So by scrapping Breeam targets for schools, he’s solving the problem of free schools having to comply with certain standards,” Robinson said.
“In our view, this is a slow, calculated erosion of best practice, which undermines the efforts of both industry and the public sector in striving to reduce school running costs while creating an improved learning environment.” Scape has created a standardised school design with Willmott Dixon and last month Warwickshire County Council became the first local authority to buy it for a primary school in Rugby.