An edited version of this forecast was published in July’s Building magazine.
With Andy Murray (just) failing to lift the spirits of the nation, Bradley Wiggins was left to boost the U.K.’s morale. But surveys of sentiment have fallen. The economic outlook appears to be deteriorating. The Organisation for Economic Co-operation and Development’s (OECD) latest index shows that almost every major economy in the world is slowing down.
In the U.K., construction surveys paint a worsening picture for the industry. Tenders received in the second quarter of 2012 reveal a mixed canvas with some prices edging up but others coming in well below budget as contractors fight for attractive projects to fill order books with holes.
Overall, prices in the second quarter are judged to have remained flat despite some further increases in materials prices. This means that prices have edged up and down for the last eighteen months without moving far and remain nearly 20% below their peak in 2008.
Both Experian and the Construction Products Association (CPA) have, in their recently released summer 2012 forecasts, downgraded their forecasts from three months earlier.
Experian now expects a slightly greater fall in activity in 2012 but, more significantly, whereas in the spring they had forecast a return to growth in 2013, now expect a further contraction and a much weaker return to growth in 2014.
The CPA had previously expected a slight decline in new build work in 2013 but now forecasts a stronger tail off in both 2012 and 2013 but a more significant rebound in 2014.
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