Cautious optimism in construction sector
Mon, 13 Jul 2009
Government funding has helped businesses a little, but the extent of the positive impacts depends on what sector you work in, it has been claimed.
Commenting after the Glenigan Index found that Scotland and Northern Ireland have bucked the trend of construction decline, thanks to increases in public sector work, Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said state money will only provide "a bit of support" to UK firms.
He added: "House builders seem to be a little bit more cheery but it's all relative, they're still not talking about mass developments again, they're just saying they're managing to sell some of their own sites and they're looking at sites.
"The good news is that some of the banks are willing to lend on private finance initiative again which completely closed down for a while."
However, Mr Rubinsohn said that the main problem going forward is that government money will begin to run out quite quickly – meaning construction firms could run into further difficulty further along the line.
The outlook for the construction industry has deteriorated sharply over the last three months according to the latest forecasts from the Construction Products Association.
It has predicted that output will fall by a record 16 per cent in 2009, compared to the April forecast, which indicated a fall of 12 per cent.
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