SMEs in particular continue to be constrained by a lack of finance and sharply falling public sector funding, the survey suggests.
Key survey findings include:
鈥⒙犅犅犅犅犅犅犅犅� 37% of large and medium sized building contractors, on balance, reported that output in 2011 Q4 was lower than during the same quarter one year earlier.
鈥⒙犅犅犅犅犅犅犅犅� The civil engineering workload balance was positive (at +5%) for the first time since 2008 Q1.
鈥⒙犅犅犅犅犅犅犅犅� Manufacturers of light side products benefitted from growth in export sales with 37% of firms, on balance, reporting year-on-year sales growth in Q4.
鈥⒙犅犅犅犅犅犅犅犅� Enquiries levels to SME contractors were widely reported to be below average, by -30% on balance.
鈥⒙犅犅犅犅犅犅犅犅� Nearly half of specialist contractors surveyed reported a quarter-on-quarter reduction in orders in Q4.
鈥⒙犅犅犅犅犅犅犅犅� Materials cost inflation and rising energy prices were the main drivers of strong overall cost inflation in the last three months of 2011.聽
The findings support latest data published by the that said construction output in the fourth quarter of 2011 fell by 0.5% compared with the previous quarter, although it grew by 2.8% for the year as a whole.
Commenting on the survey, Construction Products Association economics director Noble Francis said:聽 鈥淐uts to public sector capital budgets had a tangible impact on activity across the construction supply chain, exacerbated by economic uncertainty and a lack of lending.聽 As a consequence 2011 Q4 was very challenging for the industry.聽 However, of even greater concern, previously positive workloads in sectors such as commercial and private housing have now become negative. Furthermore, prospects for the industry in 2012 are poor with sharply deteriorating order books and enquiries.
鈥淭he only bright spots appear in exports and infrastructure. Yet this is unlikely to be sufficient to offset all the other sectors in which workloads are declining.聽 As a consequence, instead of being a driver of growth in the UK, construction is likely to hinder economic recovery this year unless the Chancellor takes steps in next month鈥檚 Budget to stimulate the industry and the economy as a whole.鈥�
UK Contractors Group director Stephen Ratcliffe said: 鈥淏usiness conditions remain challenging but there are also still opportunities for the industry.聽 UKCG is working with government to help ensure the pipeline of public sector projects announced at the time of the autumn statement is translated into reality and that we help deliver the best possible value to a cash strapped public sector to ensure some continuity of work.鈥�
National Federation of Builders chief executive Julia Evans added: 鈥榃ith energy and material costs up, confidence down and lending conditions set to deteriorate further through 2012, it is hard to see how much of the industry will survive if these conditions are sustained. Marquee projects such as the Olympic Stadium will always give the impression of a vibrant industry but the vast majority of firms will only be able to survive for so long with cutthroat competition for work, unreasonable credit rates and late payment before they join the 2,700 construction firms that went into administration in 2011.鈥�
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