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BandWagon

Construction Firms Suffer First Fall In Output In 11 Years

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BRITAIN’s construction industry recorded its first drop in output for 11 years in 2005, despite government promises of large-scale public investment, according to a report to be published this week.

The Construction Products Association (CPA) will reveal in its annual forecast that construction output dropped unexpectedly by 1.3% last year, though it is expected to recover by a modest 0.9% this year, before picking up to 3.1% growth in 2007.

http://business.timesonline.co.uk/article/...1965085,00.html

Dropped unexpectedly!

What planet are these people living on?

It's called a recession, and it's coming your way.

Historically the busts in the market have been relative in magnitude to the boom.

If history is anything to go by, this could be the biggest bust in living memory.

Edited by BandWagon

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"Dropped unexpectedly!"

Its because they have been believing their own bull-sh*t for so long that HPI is here to stay.

:lol::lol::lol:

The Construction Industry does not start and stop at residential building. When are people on this forum going to understand this!!!

If you read the report Public Sector Works including the failing PFI fell by 2.9%. Private Sector Work which includes residential construction (among many other sub-sectors like retail and office blocks etc) only fell by 0.5%.

BTW did you know that it costs private construction companies an average of £11.5 million to bid for a PFI Hospital Project? It is no wonder many large Construction Co.s prefer to spend their money bidding for work on the Continent (where averages costs are more like £400k for a Hospital Bid).

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The Construction Industry does not start and stop at residential building. When are people on this forum going to understand this!!!

If you read the report Public Sector Works including the failing PFI fell by 2.9%. Private Sector Work which includes residential construction (among many other sub-sectors like retail and office blocks etc) only fell by 0.5%.

BTW did you know that it costs private construction companies an average of £11.5 million to bid for a PFI Hospital Project? It is no wonder many large Construction Co.s prefer to spend their money bidding for work on the Continent (where averages costs are more like £400k for a Hospital Bid).

you re right. lets put it in context

new housing ( 85% controlled by the large developers) is about 40% of construction activity. i reckon new housing was down c 20% yoy in the 2nd half of 2005

repairs maintenance and improvements ( RMI) is about 50%. i beleive that it held up over 2005. a lot of this is home improvements with people upgrading properties, extending etc.

public sector and other commercial is about 10% .

i am surprised that it fell, as i had believed that goverment funded work ( schools, hospitals etc) seemed to be going great guns.

ok what are the prosects for 2006.

public sector/commercial at only 10% wont make a lot of difference whether it grows or falls.

new housing i think will continue to drop especially with the overhang of all the apartments etc being built and not sold.

RMI i think will also drop off as people are more cautious of spending money on homes if they realise that they may no longer recoup the cost through higher house prices./values

most of the heavyside building materials companies expect a tough year in 2006.after avery tough 2005

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you re right. lets put it in context

new housing ( 85% controlled by the large developers) is about 40% of construction activity. i reckon new housing was down c 20% yoy in the 2nd half of 2005

repairs maintenance and improvements ( RMI) is about 50%. i beleive that it held up over 2005. a lot of this is home improvements with people upgrading properties, extending etc.

public sector and other commercial is about 10% .

i am surprised that it fell, as i had believed that goverment funded work ( schools, hospitals etc) seemed to be going great guns.

ok what are the prosects for 2006.

public sector/commercial at only 10% wont make a lot of difference whether it grows or falls.

new housing i think will continue to drop especially with the overhang of all the apartments etc being built and not sold.

RMI i think will also drop off as people are more cautious of spending money on homes if they realise that they may no longer recoup the cost through higher house prices./values

most of the heavyside building materials companies expect a tough year in 2006.after avery tough 2005

Where did you get your statistics from?

I can't find any stats for 2005 (only had a very quick look) but the stats for 2004 from the DTi look like this (all in £millions).

All Private - 41,618

All Public - 15,474

This means that all private works accounted for 73% of all construction activity and all public works accounted for 27% in 2004.

Private Works can be broken down further (very fine detail available from the DTI web-site if you are interested) into the following sectors;

New Housing 16,818 (29% of all Construction Activity)

Infrastructure - 4,015 (7% of all Construction Activity)

All Industrial (factories, warehouses etc) - 3,978 (7% of all Construction Activity)

All Commercial (offices, shops etc) 16,807 (29% of all Construction Activity)

Therefore New Housing at only 29% whilst significant is not as important as all non-housing private works at about 43% of all construction activity in the UK. Note Public works also includes Housing.

At 27% of all Construction Activity in the UK I think Public Works make a significant difference to construction firms and will continue to do so in 2006.

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