Economy: Recruitment market by sector: Construction

first_imgThis article first appeared in Recruitment Trends & Forecasts.To subscribe or for more information call Robert Cannon 020 8652 8803 or e-mailRobert Cannon Comments are closed. Previous Article Next Article The building and construction industry continues to surge ahead, boosted byhigher government spending, particularly on infrastructure, school buildingsand hospitals. Last year, total construction output rose by 3.5%, more thandouble the growth prevailing in 1999 and 2000. The industry is on course tomaintain these high levels of growth over the next two to three years. In 2001, much of the growth came from increased spending on repairs andmaintenance and improvement, rather than new-build. Overall, repairs andmaintenance and improvement rose by 4.5%, whereas new-build increased by only2.8%. Indeed, there were some big falls in some areas of new-build includingprivate housing (-4.6%), and industrial (-2.3%). This year and over the following couple of years, growth is expected to bemuch more balanced. The only sector not expected to grow this year isindustrial, which is still suffering from the recession in the manufacturingindustry, which has hit business investment and the willingness to invest inproperty very hard indeed. Infrastructure spending is being boosted by work on major projects such asthe Cross Channel Rail Link, West Coast Mainline, the Birmingham NorthernRelief Road and Terminal 5 at Heathrow. This trend has been somewhat offset bya cutback in capital spending by the water authorities. The number of houses completed last year by private housebuilders was thelowest for 20 years. The lack of new-build was not for lack of demand, as thesharp rise in new house prices testifies. It is rather the lack of supplycaused by planning restrictions which are severely limiting the increase in thehousing stock, especially in London and the South East. Similarly, new social housing starts in 2001 were at their lowest for morethan 50 years. The Government is beginning to address the shortage of socialhousing and has pledged a substantial increase in funding for housingassociations over the next few years, so the sector should begin to grow again.The commercial sector has grown strongly over the past three years, and thisrate of growth is expected to continue in 2002. However, new orders for thecommercial sector have fallen off recently and this sector is predicted to cooloff in the coming years. Housebuilders have been posting positive figures, as low interest rates,inflation and unemployment have buoyed demand for new homes. Westbury declareda 14% rise in annual profits and predicted further growth, while Bovis HomesGroup said sales and prices have continued to improve since its reported 19%jump in 2001 profits in March. McCarthy & Stone, the retirement homebuilder, posted a 19% rise inhalf-year profits. Hanson, the building materials supplier has reported that it expectsearnings in the first half of the year to be up on last years performance.Lafarge, the world’s biggest building materials maker, reported a 38.6% rise infirst quarter sales, rising to £1.95 billion, while Travis Perkins saw a risein like-for-like sales of 6% in the first 4 months of 2002. The buoyancy of the construction industry is reflected in the strong growthin earnings which are running at about 6% per annum at present and the growthin employment which averages around 50,000 in 2002. center_img Economy: Recruitment market by sector: ConstructionOn 1 Aug 2002 in Personnel Today Related posts:No related photos.last_img read more