RISING costs and uncertainty relating to Brexit are to blame for the sharp drop in output growth in January 2019, the Federation of Master Builders (FMB) has said in response to the latest Purchasing Managers’ Index data (PMI).
The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager’s Index incorporates survey results provided by construction firms throughout the country.
A reading above fifty suggests the construction sector is expanding, while a reading below fifty suggests the construction sector is in contraction.
The January 2019 PMI data revealed a fall from 52.8 in December to 50.6 in January, against the neutral reading of 50.0. January data pointed to a loss of momentum for the UK construction sector, with business activity growth grinding to its weakest for ten months.
All three categories of construction output recorded weaker trends than those reported in December.
Residential work was the strongest performing area, although the latest expansion was only modest and the slowest seen since March 2018. Civil engineering activity increased marginally, with the rate of growth much softer than December’s 19-month high.
Commercial work was the weakest performing area of construction output in January. Latest data indicated a decline in work on commercial construction projects for the first time in ten months. Anecdotal evidence suggested that Brexit-related anxiety and associated concerns about the domestic economic outlook continued to weigh on client demand.
New business growth eased to an eight-month low in January.
Construction firms widely commented on softer demand conditions and longer sales conversion times, reflecting a wait-and-see approach to spending by clients. Concerns about the near-term outlook for new projects resulted in more cautious staff hiring policies at the start of 2019. The latest survey pointed to the slowest rise in employment numbers since July 2016.
However, construction firms remain positive about the outlook for business activity in 2019. Around 41% of the survey panel anticipate a rise in output, while only 16% forecast a fall.
Optimism had, however, fallen month on month. Large-scale civil engineering projects were cited as a key source of optimism, while Brexit uncertainty was the most commonly cited concern.
Tim Moore, Economics Associate Director at IHS Markit, which compiles the survey: “UK construction growth shifted down a gear at the start of 2019, with weaker conditions signalled across all three main categories of activity.
“Commercial work declined for the first time in ten months as concerns about the domestic economic outlook continued to hold back activity.
“The latest survey also revealed a loss of momentum for house building and civil engineering, although these areas of the construction sector at least remained on a modest growth path.”
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “The sector suffered a sharp drop in output growth in January, and the softest rise in purchasing volumes since September 2017, as Brexit continues to hamper progress and dampen client confidence.
“The biggest shock came in the form of job creation which has managed to suffer the slings and arrows of Brexit highs and lows with solid hiring since the referendum result. Employment rose at the slowest rate since July 2016 and with optimism also in short supply, the sector only needs a small nudge to tip it closer to a recession.”
Commenting on the results, Brian Berry Chief Executive of the FMB, said: “The latest PMI data show a slowdown in growth in construction with business activity growth easing to its weakest for ten months. The ongoing political uncertainty is partly to blame for this setback.
“Political uncertainty is the enemy of construction firms that rely on the spending power of homeowners to commission home improvement projects. The UK is set to leave the EU next month, and yet we are still none the wiser about what the future holds. Given these intense headwinds, it should not be surprising that the sector suffered such a sharp decline.”
Mr Berry continued: “Alongside the political uncertainty, the cost of doing business is also rising for construction firms up and down the country. Material prices have been rising steadily since the depreciation of sterling following the EU referendum.
“Looking ahead, material prices are expected to continue to cause a headache for the construction industry with recent research from the FMB showing that 87% of builders believe that material prices will rise in the next six months. What’s more the construction skills crisis means that key trades are extremely difficult to recruit and the upshot of this is rising wages in construction.
“Tradespeople know they can command higher salaries than they did previously as workers are scarce, and this means a squeeze in margins for firms. This will only worsen if the post-Brexit immigration system that the Government has planned goes ahead.
“If the sector isn’t able to draw upon crucial EU workers of all skill levels, who have so far served to mitigate this shortage, the slowdown of growth will continue.”
The Range’s Swansea Store Shortlisted for ‘Best Christmas Display’
Christmas has arrived early for The Range stores in Wales, boasting gigantic displays of all-things festive! The Range is well known for going all out during the Christmas season to create a fun and magical experience full of trees, lights, decorations and much more for their customers to enjoy and this year is no exception. The Range in Swansea surpassed expectations with a display so great, it’s left them shortlisted for ‘Best Christmas Display’ out of all The Range’s 182 stores.
Swansea Building Society unveils bespoke mortgage product for medical professionals
Following extensive consultation with mortgage brokers and customers, Swansea Building Society has unveiled a new mortgage product specifically designed to offer medical professionals enhanced terms and a better deal.
The Medical Professional Mortgage Product is designed specifically for cases where the applicant, or one of the applicants in the case of a joint mortgage, is a medical doctor, surgeon or dentist. They might be looking to purchase a property, re-mortgage from another lender, or raise capital against equity in a property.
This new product also allows customers to borrow a higher amount against their income compared with standard mortgage products, subject to meeting affordability rules. Sole customers will be able to borrow up to 5.5 times their sole income (the standard criteria is a multiple of 4.5) while joint customers will be able to borrow up to 5.0 times their joint income (the standard criteria is a multiple of 3.5).
The new product was made available to customers from October 1, 2020.
Alun Williams, chief executive of Swansea Building Society, said:
“We are constantly reviewing what we do based on feedback from customers, brokers and our wider analysis of the mortgage landscape to ensure we are competitive where relevant in the current market.
“In this case, we wanted to develop a product that would reflect the current and future earnings potential of some of our clients who work in the medical profession. We are delighted to be able to roll this product out; we have already had very good feedback from our network of brokers.”
Simon Mayo to join Swansea local radio
BAUER MEDIA is proud to today detail a new local initiative that Greatest Hits Radio and The Wave will launch within Swansea and South Wales aimed at helping local workers, charities and businesses as they deal with the economic impact of the Covid-19 pandemic.
Swansea Sound will lead the ‘Getting You Back to Work’ campaign, as it relaunches as Greatest Hits Radioin September. The scheme, which will also run across sister station The Wave, aims to promote local job opportunities both on-air and online. Local employers will be encouraged to submit vacancies for inclusion, allowing them to reach a wide audience of local job-seekers free of charge. Job vacancy bulletins will be broadcast four times a day to local audiences and will be promoted on the relevant Greatest Hits Radio and The Wave websites.
As Swansea Sound gets set to join the Greatest Hits Radio Network, it is also announced today that it will welcome esteemed broadcaster Simon Mayo to its line-up. The former BBC Radio 2 host currently hosts a daytime programme on Greatest Hits Radio’s classical sister station, Scala Radio. However, with this move he’ll be returning to his popular music roots as he presents a new weekend show. ‘The Album Show with Simon Mayo’ will be a weekly three-hour programme dedicated to the greatest albums of all time, including features that explore listeners’ record collections and a weekly Classic Album Countdown. This show aims to celebrate the good times and great memories albums bring as Simon plays their Greatest Hits.
Greatest Hits Radio, which will officially launch across Swansea and South Wales on 1st September, offers listeners the biggest songs of the 70s, 80s and 90s, celebrating music from iconic artists like Blondie, Queen, George Michael, Madonna, Fleetwood Mac, David Bowie, Elton John and Whitney Houston. The station’s presenters will include a local weekday line-up as well as legendary broadcaster’s Mark Goodier, Paul Gambaccini, Simon Mayo, Janice Long and Pat Sharp on weekends.
Online applications for the ‘Getting You Back to Work’ campaign will open on the 1st September 2020. Employers looking to participate should email firstname.lastname@example.org more information on how to apply.
Graham Bryce, Group Managing Director – Hits Radio Network Brand,said, “As we look to the future, we’re very excited to add Simon Mayo to our weekend line-up. Simon’s track record speaks for itself and to have someone of his experience and status join the network adds a new dimension to the Greatest Hits presenter line-up.
“Alongside this, our stations continue to be committed to the local community and we’re proud to launch this initiative to provide a valuable boost at a time of great uncertainty and hardship. We know the pandemic has hit communities across the UK hard, and we want to use our privileged position to promote opportunities.”
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