Raised hopes from construction sector

A raft of reports published in the past few days suggests the relentless contraction experienced in the construction sector that has hit landscape professionals and amenity suppliers so hard over the past 18 months could, at long last, be over.

But caveats remain - not least the impact of cuts in public spending already hitting the regeneration and civil engineering sectors, which could all too easily set the market indices off in the wrong direction again.

First, the good news. As we report this week (page 3), National House Building Council figures show applications to build new homes during the early months of this year were up by two thirds compared to the same period last year. Those figures are backed up by statistics out last week from the Chartered Institute of Purchasing and Supply (CIPS) that show overall construction activity increased during March for the first time since February 2008 - with the housing sector leading the charge. The CIPS figures also recorded growth in activity in the commercial sector for the first time since February 2008.

The impact of the upturn in applications is already being felt by landscape architects and is significant enough for firms such as Farrer Huxley Associates not previously in the commercial housing building sector to expand into this now brighter spot. Of course, for contractors and plant suppliers, the benefit from current applications remains some considerable way off. Nevertheless, their presence in rapidly increasing numbers is very good news. The seven months of increased activity in housing construction recorded by the CIPS, which reflects social housing projects coming through, will hit home sooner for suppliers.

Negative factors include the inevitable worry that since the upturn in activity starts from such a low base, it may prove short lived. Meanwhile, looming cuts in public sector spending could exacerbate the contraction recorded by the CIPS in civil engineering activity and more certainly will exacerbate the slow down already making itself felt in regeneration. As we will report in more detail next week, the regeneration sector's top 100 projects have already seen an eight per cent drop in investment in 2009.

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