House
Building: March 2003
In March 2003, it is estimated that 13,700 dwellings were started in England
and 12,300 were completed. The equivalent figures for Great Britain were
17,000 and 15,000. Dwelling starts in England during the three months
to March were up 5 per cent (after allowing for seasonal variation) on
the same period a year ago. Completions, on the same basis, were up 4
per cent.
Starts in the three months to March were up 6 per cent on the previous
three months. Completions, however, were down 4 per cent resulting from
the low figure in January.Comparison of the financial years ending March
2002 and March 2003, shows starts in England up from 151 thousand to 152
thousand (1 per cent) and completions up from 130 thousand to 139 thousand
(7 per cent).
Starts and completions in Great Britain followed similar trends between
2001/02 and 2002/03: starts up 1 per cent and completions up 6 per cent.
House
Prices Rise but Market Slows - Fewer Houses are Being Sold
The average house price in England and Wales increased by nearly 20% during
the past year, official figures show.
The Land Registry said prices were 19.7% higher during the first three
months of this year than a year earlier.
The average property was worth £145,897 between January and March
compared with £121,881 at the same time in 2002.
But the cost of a typical home in the first three months of 2003 is now
slightly lower than six months ago, when the average house price cost
£146,150 - and only up 0.2% on the previous quarter.
The volume of sales also fell by 4.63% from 227,810 to 217,262 between
January and March compared to the previous year.
Slowdown emerging
Martin Ellis, chief economist at Halifax, said: 'I think this is another
sign that the market is slowing.
'This goes with other signs that house price inflation is easing and that
the housing market has passed the peak of the boom.'
The figures - the most comprehensive measure of property prices - collate
the price paid for every English and Welsh home sold in the January to
March period.
They provided further evidence of a slowdown in the capital's housing
market.
Price increases in Greater London were the slowest of all regions, with
prices rising by 12.1%.
The number of properties sold for more than £1m in the capital fell
from 390, during the last three months of 2002, to 303 in the first part
of this year.
This was way below the 628 recorded in the third quarter of 2002.
Boom areas
The Land Registry said that all economic regions in England and Wales
had experienced an increase in average house prices.
And despite the emergence of a slowdown in the capital, an average property
remained much more expensive than in other parts of the country.
On average it costs £240,126 to buy a home in London, compared with
just £111,405 in the East Midlands - the area of highest growth.
Other regions which experienced big increases were the South West, Yorkshire
and Humber and Wales.
Biggest increases
The properties which gained most in value during the period were semi-detached
homes.
On average, this style of property increased by 23% over the year.
New semi-detached homes did the best out of all property classes, increasing
by 28% in value.
Detached properties also gained, rising by just under 23%.
In particular, older detached properties did well, increasing in value
by more than 23%.
Product
Manufacturers Enjoy Firm Start to 2003
The Construction Product Association's
latest Trade Survey reveals a buoyant construction products industry,
with almost two-thirds of surveyed firms reporting sales up on the preceding
three months and a quarter reporting volumes rising by over 5%.
Commenting on the Survey, Allan Wilén, Economics Director said:
'Construction product manufacturers have enjoyed a pick up in sales since
the New Year as contractors make up for ground lost to poor weather during
the closing months of 2002. Despite the recovery, however, sales volumes
failed to match those of the first quarter of 2002, especially for heavy
side firms, many of which saw their sales temporarily boosted a year ago
by advance sales ahead of the Aggregates Tax.
'There is also continuing optimism as manufacturers anticipate sustained
growth over the next twelve months, with 30% of firms expecting sales
to increase by more than 5%. On a cautionary note, with private sector
demand forecast to cool, growth will be crucially dependent upon the timely
delivery of the Government's investment plans.
'Furthermore, cost pressures have intensified with an increased tax burden
adding to rising labour, fuel and raw material costs.On balance 59% of
firms have seen their unit costs rise over the last year, with almost
a quarter reporting increases of over 5%. Firms now have to contend
with the rise in national insurance rates, a factor that will not help
the industry's competitiveness against overseas suppliers.
'Encouragingly, and in contrast to many other parts of UK manufacturing,
the response in our industry has been to increase capital expenditure,
both to contain unit costs and to accommodate the anticipated rise in
public sector funded construction activity. Product improvement and customer
research remain priority areas over the next year, although a growing
proportion of firms intend to spend more on plant and equipment in a move
that can only improve productivity.'
Other key findings of the survey show:
*Rising cost pressures have added to domestic selling prices. On balance
62% of firms have raised the domestic selling prices over the last year,
with a fifth reporting increases in excess of 5%.
*Half of surveyed firms report that importers have continued to gain market
share in the UK, with cheap imports and poor demand in importers' home
markets cited as the key drivers behind the rise.
*Manufacturers reported a tentative pick up in export sales, with a quarter
of firms on balance reporting first quarter sales up on a year earlier.
The first positive balance for over a year.
The Construction Products Association represents the UK's producers and
distributors of construction products, components and fittings.
It acts as the voice of the construction products sector, representing
the industry-wide view of its members. The Association is committed to
demonstrating the importance of a growing, profitable and sustainable
construction products sector within the UK economy.
Contact: Allan Wilén
Tel: 020 7323 3770
Email: mailto:awilen@constprod.org.uk
DTI:
New Construction Orders - March 2003
Orders
in the twelve months to March 2003 rose by seven per cent compared to
orders in the previous twelve months, though orders in the first quarter
of 2003 fell by one per cent compared to the same quarter a year earlier.
Orders in the first quarter of 2003 rose by three per cent compared to
the previous quarter, largely due to infrastructure orders. During the
twelve months to March 2003, there were rises in all sectors except private
industrial and infrastructure orders. All orders figures quoted are seasonally
adjusted and in constant (1995) prices.
Private housing orders in the twelve months to March 2003 rose by 11 per
cent compared to the previous twelve months. Orders in the first quarter
of 2003 rose by two per cent compared with the previous quarter and rose
by 11 per cent compared with the same quarter twelve months ago. Public
housing and housing association orders in the twelve months to March 2003
rose by two per cent when compared to the previous twelve months. Public
housing and housing association orders in the first quarter of 2003 rose
by 18 per cent compared to the previous quarter, and increased by 13 per
cent compared to the same quarter twelve months earlier. All comparisons
in this sector are affected by large variations due to its relatively
small size.
Infrastructure orders in the twelve months to March 2003 decreased by
12 per cent compared with the previous twelve months. Orders in the first
quarter of 2003 rose by 97 per cent compared with the previous quarter,
but were 29 per cent lower than in the same quarter twelve months earlier.
Public non-housing orders (excluding infrastructure) in the twelve months
to March 2003 rose by 36 per cent when compared with the previous twelve
months. Orders in the first quarter of 2003 fell by 31 per cent compared
with the previous period, but were 25 per cent higher compared to the
same quarter twelve months earlier. The large increases and decreases
were due to an exceptionally high figure for the public miscellaneous
sector in December 2002 and a relatively high figure for the same sector
in February 2003.
Private commercial orders in the twelve months to March 2003 were seven
per cent higher compared to the previous twelve months. Orders in the
first quarter of 2003 were unchanged compared to the previous period,
but were one per cent higher than in the same quarter twelve months earlier.
Private industrial orders in the twelve months to March 2003 fell by six
per cent compared with the previous twelve months. Orders in the first
quarter of 2003 were three per cent lower than in the previous period,
but were eight per cent higher compared to the same period twelve months
earlier.
McCarthy
Profits Show Further Growth
McCarthy
& Stone says it has produced an 'outstanding' performance with an
80% rise in pre-tax profits to almost £40 million.
The Bournemouth-based retirement homes builder says turnover in the six
months to February 28th improved 34% on last year after 831 units were
sold on 95 sites.
Operations in the South East and South West of England turned in particularly
impressive performances, the company says.
McCarthy has only modest exposure to the property market within the M25
motorway ringing greater London.
The market there has weakened but the company expects to escape largely
unscathed because only 4% of sales in the first half came from inside
the M25.
Chairman John McCarthy said: 'Whilst we anticipate some softening in the
market, all our regions continue to report healthy levels of activity
and we entered the second half of the year with reservations comfortably
in excess of the comparable period.
'We are confident that we will deliver another good performance for the
year.'
Pre-tax profits rose to £39.7 million compared with £22.1
million in the first half of last year.
Sales were £102.1 million this time with the average sale price
rising 19% to £122,900.
The company says shareholders will be paid an interim dividend of 3.9p,
up 18% from 3.3p last year.
UK
Construction Company Wins £70,000 Worth of Contracts in Tanzania
A
Stockport-based service company has won £70,000 worth of business
in Tanzania after receiving specialist market information advice from
Trade Partners UK - the government body dedicated to providing UK companies
with global expertise on international trade and investment.
Trading Maintenance and Services (TMS) UK Ltd specialises in supplying
spare parts for construction machinery and has been dealing with other
East African countries for some years. A natural business progression
led them to explore the nearby Tanzanian market. John Rogerson, export
manager for TMS UK, commissioned a Tailored Market Information Report
for the construction and mining industry from Trade Partners UK commercial
staff at the British High Commission in Dar es Salaam.
'The report provided us with some valuable contacts which we were able
to follow up here in the UK first and then take further when we visited
the market last year. Trade Partners UK's assistance with new markets
is very important to us and means we can concentrate on key areas that
will benefit our business,' said Mr Rogerson.
The company has made small but significant gains in the region but believes
that sales will increase over the coming months due to the established
nature of the mining industry in Tanzania.
UK
property prices remained unchanged during April, according to the latest
survey from the Nationwide Building Society.
The average price of a house stayed at £122,748, while the annual
rate of house price inflation fell to 22.2% from 26.2% in March.
The findings confirm the recent trend toward a cooling in the housing
market.
'House prices over the last three months have risen at their slowest pace
since December 2001 and the market is clearly less frenetic than April
last year when prices jumped 3.3%,' said Nationwide group economist Alex
Bannister.
But he added there was little likelihood of a 'damaging correction' in
the market.
Boom over
A number of recent housing surveys have indicated that the era of runaway
price increases is at an end.
'Someone on average earnings now needs nearly £15,000 over and above
a 5% deposit to be able to get on the property ladder' says Alex Bannister,
Nationwide.
On 28th April the latest study from property analyst Hometrack found prices
in England and Wales had fallen on average.
The Nationwide survey said the number of housing sales had fallen, and
noted the slowdown had been driven by a lack of first-time buyers in the
market.
'In the first quarter of 2003, the monthly average number of first-time
buyers dropped to 27,000, more than a quarter down on the same period
of 2002,' Mr Bannister said.
'If this trend persists for the rest of the year it will take the number
of first-time buyers to around 400,000.
'This would be the lowest level since mortgage markets were deregulated
in the early 1980s.'
The high cost of many properties is now posing an insurmountable barrier
to many first-time buyers.
'Someone on average earnings now needs nearly £15,000 over and above
a 5% deposit to be able to get on the property ladder,' Mr Bannister said.
Steady progress
Despite the recent slowdown, the Nationwide said it expected monthly house
price growth to return to 0.5-1% over the next few months with little
danger of a price crash.
'Whereas previous upswings in the housing market over the last 30 years
have ended with higher interest rates and a worsening jobs market the
current upswing looks unlikely to end this way given the outlook for the
wider economy,' Alex Bannister said.
'A sustained period of lower house sales and house price inflation looks
a more likely outcome - even if this appears to be a return to the sort
of housing market cycles seen back in the fifties.'
Expansion
of the UK Construction Economy Remains Robust in April, Despite Easing
to the Slowest since December 2001
The
latest CIPS / NTC Research survey
pointed to the sustained expansion of the UK construction economy in April,
as firms responded to further strong gains in order books. Nevertheless,
although still indicative of robust overall growth, the headline seasonally
adjusted 'Construction Purchasing Managers' Index®' (PMI®)- designed
to provide a single figure snap-shot of construction activity - fell slightly
for the second month running at the start of Q2. Furthermore, with the
Index measuring 53.4 in April, down from 53.8 in March, the headline index
suggested that growth of industry activity had slowed to the weakest since
December 2001.
Roy Ayliffe, Director of Professional Practice at the Chartered Institute
of Purchasing and Supply, said: 'April saw the construction sector experience
the slowest growth so far this year, yet the sharp increase in incoming
new orders is encouraging. Purchasing Managers continue to make full use
of their strategic purchasing expertise in order to keep a lid on soaring
inflation prices and protect their firms' margins.'
Continuing to underpin growth of overall activity in the construction
sector was a further marked increase in housing activity in April. Firms
again reported strong demand for housing projects. However, despite a
slight acceleration ofthe seasonally-adjusted Housing Activity Index,
from 54.5 in March, to 55.4 in April, the rate of growth of housing activity
remained slower than that seen throughout the whole of 2002.
April's survey also pointed to increased commercial construction activity,
although the rate of growth slowed to near stagnation and was the weakest
in the current period of growth, which began in January 1999. The seasonally-adjusted
Commercial Activity Index came in at 50.3 in April, down from 51.1 in
March. Many panel firms attributed weaker growth in the commercial sector
to the reluctance of clients to place any new contracts as a result of
general business uncertainty. Meanwhile, levels of civil engineering activity
declined modestly for the first time in almost two-and-a-half years in
April.
Although the rate of growth of overall activity eased marginally, April's
data suggested that the rate of growth of new orders picked up to the
fastest since last December. The seasonally-adjusted New Orders Index
came in at 58.7 in April, compared to 56.3 in March. Firms reporting fuller
order books during the month widely linked increased levels of new business
to new marketing strategies and strong residential demand. However, a
number of of firms also noted delays relating to the commencement of new
contracts.
Over a fifth of all those firms surveyed reported that they had increased
their volumes of purchases compared to one month earlier, in order to
meet their requirements for new construction projects. At 52.3 in April,
compared to 52.6 in March, the seasonally adjusted Quantity of Purchases
Index pointed to increased construction material buying for the seventeenth
consecutive month. The rate of growth of purchasing activity remained
relatively subdued but, with firms reporting reduced stock holdings at
suppliers, average lead-times lengthened significantly, and at the fastest
rate since January.
The average price of inputs rose sharply again in April, with the rate
of inflation close to March' s seven-month high. The seasonally adjusted
Input Prices Index recorded 62.7 in April, down from 63.7 in March. Firms
widely linked increased costs to the inflationary effects of higher oil
prices on transportation costs, but also to shortages of certain construction
materials.
Construction sector employment continued to rise in April, as firms again
recruited additional staff to meet increased workloads. The seasonally-adjusted
Employment Index came in at 51.8 in April, compared to 52.4 in March.
Furthermore, with the growth of employment lagging behind that of activity,
the survey suggested that output was also being increased through productivity
gains.
Finally, optimism surrounding future business activity in the UK construction
sector remained strongly positive in April. Finns generally reported that
confidence had been boosted by planned expansions, hopes of an increased
number of public and private sector contracts up for tender, and the end
of full scale hostilities in Iraq.
New
Construction Orders: February 2003
Orders
in the twelve months to February 2003 rose by 13 per cent compared to
orders in the previous twelve months and orders in the three months to
February 2003 rose by 27 per cent compared to the same period twelve months
earlier. Orders in the three months to February 2003 rose by 15 per cent
compared to the previous three month period, largely due to public non-housing
orders although there was also strong growth in the infrastructure sector.
During the twelve months to February 2003, there were rises in all sectors
except private industrial and public housing orders.
Private housing orders in the twelve months to February 2003 rose by 14
per cent compared to the previous twelve months. Orders in the three months
to February 2003 rose by 13 per cent compared with the previous three
month period and rose by 20 per cent compared with the same three month
period twelve months ago. Public housing and housing association orders
in the twelve months to February 2003 fell by two per cent when compared
to the previous twelve months. Public housing and housing association
orders in the three months to February 2003 rose by 35 per cent compared
to the previous three month period, but fell by eight per cent compared
to the same three month period twelve months earlier. All comparisons
in this sector are affected by large variations due to its relatively
small size.
Infrastructure orders in the twelve months to February 2003 rose by 10
per cent compared with the previous twelve months. Orders in the three
months to February 2003 rose by 31 per cent compared with the previous
three month period, and were 15 per cent higher than in the same period
twelve months earlier.
Public non-housing orders (excluding infrastructure) in the twelve months
to February 2003 rose by 45 per cent when compared with the previous twelve
months. Orders in the three months to February 2003 rose by 78 per cent
compared with the previous period, and were 129 per cent higher compared
to the same three month period twelve months earlier. The large increases
were due to an exceptionally high figure for the public miscellaneous
sector in December 2002.
Private commercial orders in the twelve months to February 2003 were seven
per cent higher compared to the previous twelve months. Orders in the
three months to February 2003 were 14 per cent lower compared to the previous
period, but were four per cent higher than in the same period twelve months
earlier.
Private industrial orders in the twelve months to February 2003 fell by
eight per cent compared with the previous twelve months. Orders in the
three months to February 2003 were 19 per cent lower than in the previous
period, but were three per cent higher compared to the same period twelve
months earlier.
In
February 2003, it is estimated that 13,700 dwellings were started in England
and 10,800 were completed. The equivalent figures for Great Britain were
16,700 and 13,300.
Dwelling starts in England during the three months to February were up
8 per cent (after allowing for seasonal variation) on the same period
a year ago.
Completions, on the same basis, were up 7 per cent. (The seasonally adjusted
figures show the rate of monthly starts has been mostly level between
August and February. Monthly completions, over the same period, showed
some increase particularly in November and December.)
Starts and completions in Great Britain followed similar trends: starts
up 8 per cent (after seasonal adjustment) during the three months to February
compared with the same period last year and completions up 6 per cent.
In
January 2003, it is estimated that 12,800 dwellings were started in England
and 9,500 were completed. The equivalent figures for Great Britain were
15,900 and 12,100.
Dwelling starts in England during the three months to January were up
3 per cent (after allowing for seasonal variation) on the same period
a year ago.
Completions, on the same basis, were up 8 per cent. The seasonally adjusted
figures show that the rate of monthly starts has been mostly level between
August and January. Monthly completions, over the same period, showed
some increase particularly in November and December.
Starts and completions in Great Britain followed similar trends: starts
up 3 per cent (after seasonal adjustment) during the three months to January
compared with the same period last year and
completions up 7 per cent.
Rethinking
Construction Joins Forces with the Quality Mark Team
The
drive to grow the reputable builders registration scheme Quality Mark
was strengthened yesterday through a management partnership deal with
Rethinking Construction.
The Rethinking Construction organisation, a government and industry-sponsored
initiative, brings its valuable construction sector experience and a regional
support network to help grow the Scheme.
Under the new partnership arrangement, Rethinking Construction will manage
the trade rollout of the Scheme across the country, help develop its package
of business benefits for members and manage the Quality Mark support network
of 'hand holders' and advisers.
Rethinking Construction Project Director Peter Bishop said:
'Rethinking Construction is committed to working with partners to secure
improvements in the construction industry and working with the DTI on
Quality Mark is a natural extension of that brief.
'While Quality Mark continues to be a DTI-led initiative, Rethinking Construction
is able to bring additional resources to the table and use those to strengthen
vital areas such as the trade rollout programme across the country.
'We are very keen to get involved in the project and offer our additional
help and support to make an innovative Scheme more successful, more quickly.
'While Rethinking Construction's experience has been in the construction
industry, helping drive up standards of safety and reliability, and we
have not dealt directly in the consumer market before, the overriding
philosophy is that Quality Mark is all about delivering a better quality
of service, which is very compatible with what we do.
'Our task ahead is to increase awareness of the business benefits of membership
to promote more take-up of the Scheme. At the same time we want to do
all we can to keep developing new benefits, as, at the end of the day,
we want Quality Mark tradespeople to be more profitable than non-Quality
Mark traders. Increasing margins for reputable tradespeople also helps
free up more money for training.
'Our message is that there are distinct incentives to being Quality Mark
registered. We are not in the business of selling cheap and nasty, because
that just falls apart. It's all about providing quality and that's what
we are going forward with.'
One of the first steps Rethinking Construction will take is to recruit
upwards of seven full-time staff to work exclusively on Quality Mark.
They will include Project, Commercial Sponsorship and Business Development
Managers along with a Technical Evaluator, Events and Membership Co-ordinators.
The posts are being advertised this week in key publications, with applicants
invited to send CVs and letters explaining why they would be suitable
candidates for specific roles, to Vikki Judd at Tate Office, 7 Hanover
Square, London W1S 1HQ.
Quality Mark Implementation Manager Chris Guiton said: 'We very much welcome
this new role for Rethinking Construction. It is a practical demonstration
of how the Scheme is embedded in the Rethinking Construction agenda and
we look forward to working with their team to make Quality Mark a national
success story.'
Housebuilders
are unloved by the City according to this years Top 50 Unloved Companies
Index (UCI).
Compiled by business adviser RSM Robson Rhodes, the UCI has revealed that
many of Britain's smaller quoted companies are finding that their impressive
cash flow generation record continues to go unrecognised by the City.
This year, six of the UCI top 50 are housebuilders (Bellway, Barratt Developments,
McCarthy and Stone, Redrow, Westbury, and Wimpey), despite the housebuilding
sector looking strong for the coming year.
Greg Quine, partner at business communications consultancy Financial Dynamics,
said: 'Housebuilding is one of those classic 'unloved' sectors. Investors
like looking at high profile, sexy stocks and the housebuilding sector
just isn't sexy.'
'It could also be because it's a very capital intensive sector, or that
despite the housebuilding sector remaining strong for this current year,
investors are looking past this year to when the sector may start falling
off,' added Quine.
'Our argument is that housebuilders are churning out good hard cash so
housebuilders should tell the City to stop looking at earnings and start
looking at cash.'
The Top 50 also included Balfour Beatty, and two property developers -
Canary Wharf Group and Marylebone Warwick Balf.
The UCI identifies unloved companies as those whose free cash flow growth
record (three years historic, two years forward) is greater than the market
average but whose price to cash flow per share relative to the market
is less than the average.
£1.5
Million to cut Building Time in Half
Homes
and offices could be built in less than half the time under a £1.5
million research initiative announced on 20th March by Construction Minister
Brian Wilson. Two three-year research programmes will look at how contractors
can improve their information technology and building methods to raise
construction standards. The funding comes from the DTI's Partners in Innovation
(PiI) programme:
The two initiatives are:
* Off Site Production Programme: This delivers readymade units,
like air conditioning, bathrooms and kitchens, direct to the site. Although
popular with hotels and restaurants, 'Off Site' production currently accounts
for only one per cent of house construction in Britain. The average house
takes about 12 weeks to build, 'off site' could cut that by up to 10 weeks.
The programme aims to increase take up by promoting case studies, producing
industry guidelines, and building a database for potential off site users.
* Information and Communication Technology Programme: This aims to
increase business performance by using IT to get contractors, designers,
and architects working closer together so that 20% of
construction projects will be using integrated teams by 2004 rising to
50% by 2005.
Brian Wilson said:
'Achieving a more efficient construction industry demands the concerted
effort of the architects, contractors, suppliers and manufacturers that
work in the sector.
'Investing in this research is a major step in that direction. These Programmes
address the critical issues facing the sector, the need to find innovative
ways to bring together the supply chain and the need to exploring more
efficient and competitive ways of working.
'The Government was challenged by Sir John Fairclough to give the industry
the opportunity to undertake larger programmes of research activity to
break the cycle of project by project research.
'This initiative is a direct response to that challenge. It will encourage
firms to break out of short term thinking and look towards developing
energy efficient, innovative buildings for the long term.
'This is a beginning. We are committed to the success of Partners in Innovation
Programmes to bring about real change in the industry.'
Partners in Innovation-Programmes is a direct response to Sir John Fairclough's
February 2002 report Rethinking Construction Innovation and Research.
It called on the Government to commission bigger, longer term programmes
of research and development and set targets for the number of integrated
construction teams.
'A
Decent Home for all' - Association Calls on Government to Tackle Failing
Authorities
The
Construction Products Association is calling on the Government to redouble
its efforts to ensure there is 'a decent home for all' by 2010, in the
light of the latest findings by the ODPM: Housing, Planning, Local Government
and the Regions Committee.
Commenting on the Committee's findings Jean Emblin, the Association's
External Affairs Director said: 'We are saddened to once again have
our fears confirmed. Last year, in our Achievable Targets?
Is Government Delivering? Report, we called on the Government to set interim
targets to halve the number of 'non decent' social houses to 850,000 by
2006, to enable delivery of its stated target of a 'decent home for all'
by 2010. However, the ODPM Committee has stated that over half of
the 100 councils in danger of not meeting their current decent homes targets
have yet to develop a strategy to deliver, and these 100 councils own
58% of the total remaining non-decent stock.
'We are disappointed that the ODPM Committee has not proposed a solution
to the problem of failing local housing authorities, and would urge Government
to take over the running of such authorities in the same way that they
have done with failing schools and are proposing to do with planning authorities
that fail to meet their targets.'
New
Quality Mark Campaign is all About Trust
A
hard-hitting promotional campaign for the Government's anti-cowboy builder
initiative brings home a stark message to tradesmen, who are undecided
about signing up to the Quality Mark Scheme: the public probably don't
trust you.
And Construction Minster Brian Wilson is urging businesses to grasp the
business opportunities the scheme offers: 'Quality Mark offers a real
incentive and opportunity for reputable builders to separate themselves
from the crooks and cowboys while winning extra business in the process,'
he said.
The new campaign focuses on the underlying reason why the Scheme was launched
- cowboy builders are Britain's number one consumer problem; 106,000 complaints
were registered with Trading Standards officers last year alone.
With the epidemic constantly hitting the headlines and horror stories
routinely filling TV programmes like Builders From Hell and Rogue Traders,
many people are put off having work done because they do not know who
to trust. This costs the industry £4 billion a year in lost business.
The new marketing campaign follows a nationwide poll of 500 homeowners
in January, which revealed 86% would prefer to use a tradesman approved
by Quality Mark; 51% do not trust most tradesmen; 81% would look to see
if a tradesman is approved before giving them work and 39% would not contact
a tradesman who was not Scheme approved.
Trade-aimed adverts, featuring the message 'Get Approved' use figures
from the research as a warning to tradesmen outside the Scheme that they
will end up losing business.
Construction Minister Brian Wilson said:
'This critical problem of public trust and the fear factor caused by the
cowboy menace is addressed head-on in our new promotional campaign for
Quality Mark.
'It specifically targets tradesmen, who may be reputable, but the only
guaranteed way the public have of knowing that is if they are Quality
Mark registered. That is because it is the only Government-backed Scheme
that will become a universally-recognised banner in the domestic repair,
maintenance and improvement market.
'One of the messages that comes back to us during our regional roll-out
campaign for the Scheme to the trade is 'Why should we bother with Quality
Mark when we have full order books?'
'This comes from tradesmen who appear not to appreciate that construction
is a cyclical business and times are changing. If they do not sign up
to the Quality Mark Scheme as it gathers national momentum, they risk
'drinking in the last chance saloon' when it comes to public credibility.
I do not want to see reputable firms left out in the cold and losing business
as a result.'
Widely recognised as just the tip of the iceberg, official complaints
about the cowboys are growing at around 5% a year and an estimated £1.5
billion annually is wasted on botched home improvement work.
Quality Mark was launched to tackle the cowboy problem with Government
taking the lead because the industry itself is too fragmented to do so
- 96% of all workers are in small businesses and there are 150 trade associations
with a variety of different crests and badges, which leave the public
baffled.
The Government developed Quality Mark in partnership with representatives
of the construction industry, consumer groups and local authorities. Its
dual purpose is to bring peace of mind and protection to consumers at
the same time as promoting rather than penalising legitimate firms in
the 20 building trades who work in people's homes.
The Scheme works by placing contact details of tradesmen who reach the
Quality Mark standard on a single national register. This is accessed
free-of-charge by phoning low cost call centre number 0845 300 80 40 or
via the internet at http://www.qualitymark.org.uk.
The business benefits for traders joining the Scheme are wide-ranging,
including the opportunity to cut costs while increasing turnover and profitability.
This can be achieved through winning bigger or more added-value jobs;
working for a broader range of clients; winning higher prices through
the demonstration of quality; better staff morale; greater awareness of
customer care and using Quality Mark as a framework for improving business
practices including sub-contractor management, tendering, invoicing and
materials ordering.
Product
Manufacturers Remain Optimistic About the Future
Although
poor weather contributed to a subdued finish to 2002, the Construction
Products Association's latest Trade Survey shows that members remain optimistic
about the year ahead. The prospects for the industry are, however,
critically dependent on the delivery of promised increases in Government
investment in our infrastructure and built environment, particularly in
view of the expected slow down in private sector activity due to the current
uncertain economic and political climate.
Commenting on the Survey, Allan Wilén, Economics Director, said:
'2002 was a good year for manufacturers and suppliers with an estimated
volume increase of between 3% and 4% on average across the construction
products industry. This compares with an 8% rise recorded by DTI
in construction output as a whole. The impact of the global slowdown
on overseas trade, introduction of the aggregates tax, and changes in
the construction workload mix have all conspired to moderate sales growth
over the last year, whilst a widening in house builders margins, due to
the sharp rise in house prices, has added to the increase in construction
output volumes.
'Looking ahead, the industry anticipates further sales growth in 2003. Indeed
a quarter of firms are anticipating an increase of more than 5% in their
first quarter sales compared to a year ago, with almost 38% signalling
a rise of more than 5% over the full year. On exports, companies
are hopeful that the corner has been turned with on balance a fifth of
all firms expecting to increase their export sales over the coming year.
'Turning to investment, the industry's continued optimism is supported
by a consistent increase in capital expenditure in almost all areas and
this reflects manufacturers' positive, if cautious, outlook for construction
activity, which is combined with a determination to further enhance productivity.'
Other key findings of the Survey show:
* On balance two-thirds of heavy side and half of light side firms have
seen their unit costs rise over the last year
* Over a third of heavy side firms reported that higher taxes had added
to their unit costs, compared to a fifth of light side firms
* A third of light side firms and on balance 43% of heavy side firms have
seen importers gain market share over the last year
* Whilst the value of imports rose 3% during the first nine months of
2002, exports fell by 11%
Housebuilding
Figures: December 2002
In
December 2002, it is estimated that 10,700 dwellings were started in Great
Britain and 17,300 completed.
Seasonally Adjusted Comparisons
After allowing for seasonal variation, total starts in the three months
to December were down 2 per cent on the previous three months, and at
the same level when compared with the same period a year ago.
Completions were up 10 per cent on the previous three months and also
up 10 per cent compared with the same period a year ago.
Seasonally adjusted figures for England show similar trends for starts
and completions. Total starts were down 5 per cent on the previous three
months and down 1 per cent on the same period a year ago. Total completions
were up 11 per cent on the previous three months and also up 11 per cent
when compared to the same period a year ago.
Department
of Trade and Industry: 'Best Practice' Construction Delivers £360
Million Profits
Construction
firms which improved their management practices and raised their standards
have increased their profits by £362 million in the last four years,
Construction Minister Brian Wilson revealed recently.
Last year firms which used the Construction Best Practice (CBP) service
each gained on average 12 working days and achieved savings of £3,300.
Welcoming the figures on the day of the 'Revaluing Construction' conference
in Manchester, Brian Wilson said:
'Slowly but surely things are starting to change in the construction industry.
The figures show that the construction sector is turning practice into
profits and delivering improved value we can all be proud of.
'But Best Practice is not just about bigger profits; the UK economy is
driven by an efficient construction industry. It enables us to deliver
on the Government's investments in transport, infrastructure, health,
education, and housing.'
A series of demonstration projects were established from 1998 to illustrate
Construction Best Practice. There are over 400 of these in the UK worth
over £6 billion and they significantly outperform the rest of the
UK industry:
- They achieve an 11% increase in satisfaction over the rest of the industry
- 30% more projects report fewer or no defects
- safety records are twice as good as the industry average with savings
from reduced accidents estimated at £255 million.
- 15 % of projects complete on or ahead of time and cost.
- They are more productive, averaging £10,000 more value added per
employee than the rest of the industry.
If only a third of the industry achieved the same cost savings as these
projects, the industry would save over £600 Million.
Department
of Trade and Industry - New Construction Orders: December 2002
Orders
in 2002 rose by eight per cent compared to orders in the previous year
and orders in the fourth quarter of 2002 rose by 15 per cent compared
to the same period a year earlier. Orders in the fourth quarter of 2002
fell by 10 per cent compared to the previous quarter. During 2002, there
were rises in all sectors except private industrial orders.
Private housing orders in 2002 rose by nine per cent compared to the previous
year. Orders in the fourth quarter of 2002 fell by two per cent compared
with the previous quarter but rose by 18 per cent compared with the same
quarter a year ago. Public housing and housing association orders in 2002
rose by four per cent when compared to the previous year. Public housing
and housing association orders in the fourth quarter of 2002 fell by 11
per cent compared to the previous quarter, and fell by 14 per cent compared
to the same quarter a year earlier. All comparisons in this sector are
affected by large variations due to its relatively small size.
Infrastructure orders in 2002 rose by five per cent compared with the
previous year. Orders in the fourth quarter of 2002 fell by 51 per cent
compared with the previous quarter, and were 18 per cent lower than in
the same period a year earlier. The large fall in the fourth quarter was
mainly due to strong orders in the roads and rail sectors during the third
quarter.
Public non-housing orders (excluding infrastructure) in 2002 rose by 40
per cent when compared with the previous year. Orders in the fourth quarter
of 2002 rose by 57 per cent compared with the previous period, and were
104 per cent higher compared to the same quarter a year earlier. The large
increases were due to an exceptionally high figure for the public miscellaneous
sector in December.
Private commercial orders in 2002 were three per cent higher compared
to the previous year. Orders in the fourth quarter of 2002 were 20 per
cent lower compared to the previous period, and were three per cent lower
than in the same period a year earlier.
Private industrial orders in 2002 fell by 14 per cent compared with the
previous year. Orders in the fourth quarter of 2002 were seven per cent
lower than in the previous period, and were one per cent lower compared
to the same period a year earlier.
New
Construction Orders: November 2002
Orders
in the twelve months to November 2002 rose by five per cent compared to
orders in the previous twelve months and orders in the three months to
November rose by eight per cent compared to the same period a year earlier.
Orders in the three months to November fell by three per cent compared
to the previous three months. Falls in the infrastructure, private housing
and public housing sectors were enough to offset rises in the public non-housing,
private industrial and private commercial sectors.
Private housing orders in the twelve months to November 2002 rose by10
per cent compared to the previous twelve months. Orders in the three months
to November fell by two per cent compared with the previous three months
but rose by 18 per cent compared with the same three months a year ago.
Public housing and housing association orders in the year to November
2002 rose by nine per cent when compared to the previous year. Public
housing and housing association orders in the three months to November
fell by 23 per cent compared to the previous three months, but rose by
three per cent compared to the same three months a year earlier. All comparisons
in this sector are affected by large variations due to its relatively
small size.
Infrastructure orders in the twelve months to November 2002 were unchanged
compared with the previous twelve months. Orders in the three months to
November fell by 18 per cent compared with the previous three months,
and were 13 per cent lower than in the same period a year earlier. This
was mainly due to the roads sector.
Public non-housing orders (excluding infrastructure) in the twelve months
to November 2002 rose by 17 per cent when compared with the previous twelve
months. Orders in the three months to November rose by three per cent
compared with the previous period, and were 23 per cent higher compared
to the same three months a year earlier.
Private commercial orders in the twelve months to November 2002 were seven
per cent higher compared to the previous twelve months. Orders in the
three months to November were two per cent higher compared to the previous
period, and were eight per cent higher than in the same period a year
earlier.
Private industrial orders in the twelve months to November 2002 fell by
19 per cent compared with the previous twelve months. Orders in the three
months to November were two per cent higher than in the previous period,
and were eight per cent higher compared to the same period a year earlier.