Construction output down 11.6% y-o-y August
Discussion
As the title says, output dropped by more than 11%: http://uk.reuters.com/article/2012/10/12/uk-britai...
Pretty alarming stuff. I do know that during the whole olympic period, there was a total ban on utilities works in the areas - no holes to be dug, no overhead calbes or lamp posts to be serviced etc. - as well as blanket bans on most demolition activities, but even so, that's a hefty drop.
Will be interesting to see how it goes, but I do wonder if spade-ready infrastructure should move up the priority list now.
Pretty alarming stuff. I do know that during the whole olympic period, there was a total ban on utilities works in the areas - no holes to be dug, no overhead calbes or lamp posts to be serviced etc. - as well as blanket bans on most demolition activities, but even so, that's a hefty drop.
Will be interesting to see how it goes, but I do wonder if spade-ready infrastructure should move up the priority list now.
Really not good news.
But remember that not only was there a ban on some works during the Olympics but I imagine they were still going hell for leather in August 2011 actually building the Olympics.
So not just a negative impact - the lack of a positive one too.
As the buildings are converted post-Games we should see some recovery.
Still bad though.
But remember that not only was there a ban on some works during the Olympics but I imagine they were still going hell for leather in August 2011 actually building the Olympics.
So not just a negative impact - the lack of a positive one too.
As the buildings are converted post-Games we should see some recovery.
Still bad though.
PGM said:
It pi55ed down all summer aswell.
Yes, it has really impacted on a lot of jobs.Anything that wasn't 'out of the ground' (i.e. above footings) was on hold until at least late August in many areas.
What is clear from out bi-annual data cleansing is that very significant numbers of firms have gone to the wall in the last two years, having survived the initial part of the GFC. Whilst it is far too early to panic - we need to see Q3 & 4 numbers - I do think there are significant capacity risks for the UK. Inoter words, the ability of the pool of labour, plant machinery and professionals will be insufficient for even moderate recovery.
Machinery is being exported and not replaced with new of CPA figures are anything to go by.
Skills cannot be re-gained in an instant.
ETA to expand short answer. (Had to take a call from a customer who's looking at a major machine refurb, which is a case in point - repairing an ageing machine rather than buying new. Apparently, even in the hallowed reaches of Cheshire (Tattenhill) there is not much work on.)
Machine supply is not easy to expand quickly, certainly not without inflation and it is worth me repreating the fact that nearly all excavators have gained about 20% or more since 2009.
Staff have to meet ever stricter safety regs, so gone are the days of being able to let the tea boy 'have a go'. I remember talking to an old boy who came over from Ireland to join on of the Birmingham Irish Mafia firms. The boss took him out to site and said to him "You see that crane and that building? Get in that care and knock it down." There endeth the induction.
Also, a lot of guys have re-skilled or left these shores permanently and there is certainly no steady supply of willing or able apprentices. It could be Auf Weidersehen Pet in reverse when the recovery (even moderately) beings.
Skills cannot be re-gained in an instant.
ETA to expand short answer. (Had to take a call from a customer who's looking at a major machine refurb, which is a case in point - repairing an ageing machine rather than buying new. Apparently, even in the hallowed reaches of Cheshire (Tattenhill) there is not much work on.)
Machine supply is not easy to expand quickly, certainly not without inflation and it is worth me repreating the fact that nearly all excavators have gained about 20% or more since 2009.
Staff have to meet ever stricter safety regs, so gone are the days of being able to let the tea boy 'have a go'. I remember talking to an old boy who came over from Ireland to join on of the Birmingham Irish Mafia firms. The boss took him out to site and said to him "You see that crane and that building? Get in that care and knock it down." There endeth the induction.
Also, a lot of guys have re-skilled or left these shores permanently and there is certainly no steady supply of willing or able apprentices. It could be Auf Weidersehen Pet in reverse when the recovery (even moderately) beings.
Edited by Digga on Friday 12th October 13:51
Anecdotal I know, but a lot of the empty offices round here (Watford) seem to have suddenly sprung to life again after laying empty for several years. Two empty blocks have been refitted and now appear to be operated by "fully managed" Regus-esque type people, and another empty one is now undergoing a full refit and being marketed as "sustainable long term headquarters". Wondering if stuff that was put off during the year is finally coming back on stream? Just seems to be a glut of them all of a sudden.
Traditionally, construction activity was a key indicator of regrowth in business confidence. If you think the future's going to get better, you invest in your infrastructure, and vice versa. The construction boom-bust cycle lead that of the wider economy by a couple of years.
So, either:
- no one thinks anything good is going to happen any time soon; or
- there's so much slack (e.g. empty office space) that growth on other sectors is happening without the traditional leading spurt in construction activity.
So, either:
- no one thinks anything good is going to happen any time soon; or
- there's so much slack (e.g. empty office space) that growth on other sectors is happening without the traditional leading spurt in construction activity.
I think we also have to look at commercial/industrial from an investor's POV; since the government decided to clobber the sector by charging the (exhorbitant in any case) business rates on places lying empty; it has vastly reduced the numbers of specualtively built places. I think the building next door to us (over 600,000 sq ft) was the last largest spec build in the UK and that was pre GFC.
Medium-term this is horrendous news for UK plc - simply put, where are all the 'supposed' new or growning business going to locate themselves. It has also impacted on activity in the construction sector, no doubt.
Medium-term this is horrendous news for UK plc - simply put, where are all the 'supposed' new or growning business going to locate themselves. It has also impacted on activity in the construction sector, no doubt.
hornet said:
Anecdotal I know, but a lot of the empty offices round here (Watford) seem to have suddenly sprung to life again after laying empty for several years.
Another mega-anecdotal comment, but I drove down South from the North West during late morning last week and then back again the next day. Bearing in mind the off-peak times, I was staggered at how much traffic there was on the roads - going South sat nav was telling me the M6 through Brum was queuing and I could see it was (this was maybe 11AM) so I had to use the Toll and coming home around 1PM the M6 North of Birmingham up to where I turned off at J16 was moving but very busy both ways.
Where the hell is everyone going in the middle of the day?
anonymous said:
[redacted]
Truthfully, I don't really know, but there never actually was much 'spare' even in the boom and there seems (AFAIK - anecdoatal warning!) to be even less now.What a lot of people don't grasp is a simple fact though - most businesses need somewhere to 'be'. Fine some firms can start at teh kitchen table or in the garage or shed, but a lot simpy cannot, especially the ones whcih need to do/make stuff that suddenly (post the financial sector being Gordon's new way forward) we realise we do actually need.
Deva Link said:
Another mega-anecdotal comment, but I drove down South from the North West during late morning last week and then back again the next day.
Bearing in mind the off-peak times, I was staggered at how much traffic there was on the roads - going South sat nav was telling me the M6 through Brum was queuing and I could see it was (this was maybe 11AM) so I had to use the Toll and coming home around 1PM the M6 North of Birmingham up to where I turned off at J16 was moving but very busy both ways.
Where the hell is everyone going in the middle of the day?
During one of the 1980s recessions, my Father, who worked in Manchester, was asked the same: why is there more traffic now than before the recession? He thought for a moment, before declaring it was "all those who used to have jobs driving into town to show their children where they used to work"...Bearing in mind the off-peak times, I was staggered at how much traffic there was on the roads - going South sat nav was telling me the M6 through Brum was queuing and I could see it was (this was maybe 11AM) so I had to use the Toll and coming home around 1PM the M6 North of Birmingham up to where I turned off at J16 was moving but very busy both ways.
Where the hell is everyone going in the middle of the day?
skwdenyer said:
Deva Link said:
Another mega-anecdotal comment, but I drove down South from the North West during late morning last week and then back again the next day.
Bearing in mind the off-peak times, I was staggered at how much traffic there was on the roads - going South sat nav was telling me the M6 through Brum was queuing and I could see it was (this was maybe 11AM) so I had to use the Toll and coming home around 1PM the M6 North of Birmingham up to where I turned off at J16 was moving but very busy both ways.
Where the hell is everyone going in the middle of the day?
During one of the 1980s recessions, my Father, who worked in Manchester, was asked the same: why is there more traffic now than before the recession? He thought for a moment, before declaring it was "all those who used to have jobs driving into town to show their children where they used to work"...Bearing in mind the off-peak times, I was staggered at how much traffic there was on the roads - going South sat nav was telling me the M6 through Brum was queuing and I could see it was (this was maybe 11AM) so I had to use the Toll and coming home around 1PM the M6 North of Birmingham up to where I turned off at J16 was moving but very busy both ways.
Where the hell is everyone going in the middle of the day?
matchmaker said:
I work in construction. We are losing out at the tender stage to companies who are submitting totally unrealistic bids. They are taking work on at a loss - a recipe for disaster in the medium/long term.
We are now working with a profit margin of 1.8%
Presumably net margin? How big are your overheads?We are now working with a profit margin of 1.8%
We have been pretty busy all summer.
However we are struggling to get jobs done. Mainly due to supply chain issues. No-one holds stock any more. Nearly everything other than sheet materails and timber seems to be on special order.
Stock carpets that are now made to order, light fittings and furniture that are all on 4 - 8 weeks delivery.
However we are struggling to get jobs done. Mainly due to supply chain issues. No-one holds stock any more. Nearly everything other than sheet materails and timber seems to be on special order.
Stock carpets that are now made to order, light fittings and furniture that are all on 4 - 8 weeks delivery.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff