Latest UK construction new orders a 'worrying sign for housing'

The latest quarterly figures from the UK's Office of National Statistics (ONS) for construction new orders released Friday show that construction orders in 1Q12 were 3.6 per cent lower than the same quarter one year ago and new orders for housing were 21 per cent lower than a year earlier. However, there were some positive signs in some sectors.

Commenting on the new orders data, Noble Francis, Economics Director at the Construction Products Association said: “With government cuts impacting sharply upon construction, it is no surprise to see that public sector construction new orders were hit hard in 1Q. Of even greater concern was that new orders for housing were so badly hit in 1Q. Public housing new orders in 1Q were 41 per cent lower than a year earlier and private housing new orders in 1Q were 14% lower than a year earlier. Yet, with large house builders reporting good results recently and expressing optimism over the next 12 months, this suggests that it is SMEs who are suffering.

“However, it was not all bad news in the new orders for 1Q. There were some positive signs. Infrastructure new orders in 1Q were 60% higher than a year ago and commercial new orders in 1Q were surprisingly strong given the current economic uncertainty, 8.4% higher than a year ago. Although new orders in sectors like this can take more than a year to feed through into work on the ground and may be postponed, as happened in 2009, this is still good news for the industry.

“Overall, however, the new orders figures are undeniably poor and reinforces views from across the industry that contractors in some key sectors will be suffering from sharp falls in work over the next 12-18 months.”