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Barr Ellison Solicitors – commercial property
2 August, 2006 - 13:43 By Staff Reporter

Eastern builders see signs of an upturn

The latest surveys from two leading building industry sources indicate that the construction market in the eastern region may be improving. The latest surveys from two leading building industry sources indicate that the construction market in the eastern region may be improving.

In figures just released by the Federation of Master Builders (FMB), 33% of builders in the region said that workload in the period April to June was higher than in the first quarter of the year, while 25% reported a lower workload. This is significantly better than the national average, which saw 35% of UK builders reporting a drop in work.

A survey by the Builders Merchants Federation covering sales at builders merchants during April to June, found Eastern region's performance mirrored the national average, with sales down 1.1% on the previous year. However, when compared to the first three months of 2006, sales showed a 5.9% increase.

Commenting on the figures, BMF secretary, Peter Matthews said: "We would normally expect a strong upturn during the spring, but although the quarter on quarter figures are positive, sales remain lower than last year. The most likely reason is the continuing low levels of activity both in new housing and the refurbishment and improvement of existing housing stock. Both of these are greatly affected by consumer confidence being adversely affected by consumer debt and utility bills at record levels, leading to a slump in discretionary income."

The FMB report shows an overall downturn in all building work in Q2 except new build private housing, a similar pattern to the previous quarter. The weakest results by type of work were for repair, maintenance and improvement (RM&I) of social housing and non-residential buildings for public sector clients. In both sectors members experiencing lower workloads outnumbered those with higher workloads by more than 3:1.

Looking forward to the next quarter, many eastern region builders are optimistic with 32% of respondents to the FMB survey forecasting higher workloads and 51% expecting workloads to remain the same. This is in line with national forecasts that total workload will rise in the third quarter of the year. Both private and social housing are expected to provide the impetus, but other types of work are likely to continue to decline.

Said FMB regional director, Brian Schubert: "It is encouraging to see that a number of our members have experienced better trading conditions in the spring quarter, following a slow market throughout 2005. Future employment indicators are also positive, with members expecting to increase their workforce outnumbering those who expect to cut by 2:1."

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