In this month's Tracker, Construction Forecasting and Research reports that activity across the construction industry declined in July, with large firms and civil engineers suffering the most
The figures for the construction market in July suggest that the robust growth reported in the spring has given way to an unstable summer. In July, 5% more firms experienced a fall in activity than experienced a rise. The figure June was +2% and that for May was 鈥�8%. As might be expected, the main cause was a fall in demand.

  The bright side of this volatility is that the forecast for tender price inflation has moderated, although the outlook for employment remains similar, which may reflect the improvement in tender enquiries and orders.

Construction Forecasting and Research's previous survey, published on 30 August, suggested that large firms and those operating in the civil engineering sector were the most likely to experience a slowing in activity, and this is confirmed by this month's results. Their balances have declined by 48 and 16 percentage points respectively.

Orders data from the DTI for the second quarter of this year back up the picture of moderating activity. Orders for all new work in the quarter fell 16% on the first quarter and were up only 1% on the previous year.

However, the main cause of the decline was an abnormally high level of infrastructure orders in the first quarter. Nevertheless, a drop was also recorded in the housing and public non-residential sectors.

Information

The survey is conducted monthly among some 800 firms throughout the UK and the analysis is broken down by size of firm, sector of the industry and region. The results are weighted to reflect the size of respondent. In addition to the results published in this extract, all of the monthly topics are available by sector, region and size of firm, and quarterly questions seek information on materials costs, labour costs and work in-hand.

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Postscript

This an extract from the monthly Focus survey of construction activity undertaken by Construction Forecasting and Research on behalf of the European Commission as part of its suite of harmonised European Union business surveys. The full survey results and further information on CFR's forecasts and services can be obtained from CFR. Call 020-7808 7070 for details or log on to www.constructionfutures.co.uk