Today, it is the turn of the construction industry to enter centre stage and, as usual, these days, the news isn’t good.
First, the ONS published its New Orders in the Construction Industry: 2nd quarter 2011. Unfortunately, there weren’t many. New orders in the second quarter of 2011 fell by 16.3 per cent in comparison with the first quarter.
The total volume of all new orders is now at its lowest total since the third quarter of 1980.
New construction orders fell by 23.2 per cent, compared with the same period in 2010. Private industrial was the only sector that showed positive growth from the first to the second quarter (6.6 per cent).
New orders in construction have collapsed under the coalition. Here is the data in constant (2005) prices, seasonally adjusted in millions of pounds, showing the collapse of new orders from the second half of 2010 — in other words, when the coalition took office.
Also, today, CIPS/Markit published their PMI for UK construction, which showed that rate of growth in construction continued to weaken in August. It was notable that employment levels and sub-contractor usage continued to fall during the latest survey period, which respondents linked to either lower workloads or expectations of weaker market demand
Sarah Bingham, economist at Markit and author of the UK construction PMI said:
August data signalled slower growth of both output and new orders as headwinds caused by uncertain economic conditions impacted on sector performance. Confidence regarding future business expectations weakened to an eight-month low, highlighting concerns in respect of further potential cuts in government spending, but also a dampening of wider business sentiment, which may act to reduce investment on construction projects. Another month of job cuts again reinforced lower confidence over future activity levels within the construction sector.
In my column this week, I worried that the march of the makers may become the march of the unemployed ex-makers. The march of the ex-builders, ex-plumbers, ex-carpenters, ex-electricians and ex-roofers appears to have already started.