Commenting on the new orders for construction published today by the ONS, the Construction Products Association welcomed the rise during the final quarter of 2010 but expressed concern that this increase in orders is still dependent upon spending by the public sector on social housing, education, health and infrastructure with little sign of a recovery in the private sector.
Commenting on these latest figures, Noble Francis, Economics Director of the Construction Products Association said: ‘Although the final quarter highlighted an 18% rise in new orders, the extent to which this is reliant on the public sector is still extremely concerning given the sharp cuts in public spending outlined in the Comprehensive Spending Review that will occur after April. Public housing orders were 69% higher than during the fourth quarter compared to the third quarter. Orders for public non-housing, which includes education, health and work on the Olympics, rose 29% during the final quarter and infrastructure orders rose 37% over the same period.”
“While commercial and private housing orders remained flat, orders for industrial factories and warehouses rose by 14% during the final quarter of the year yet, overall, orders for construction work in 2010 as a whole still remained at 2009 levels. Given the extent of the public sector cuts it is essential that private sector construction picks up. The Association has made a number of suggestions regarding this in advance of the Budget, such as reducing VAT on repair and maintenance work valued less than £10,000 and work that improves the Energy Performance Certificate rating of a property by 10 points. Measures such as this clearly indicate how construction can help to drive economic growth and rebalance the economy at a time when public finances are constrained. ’
