{"id":832882,"date":"2025-03-10T08:11:44","date_gmt":"2025-03-10T13:11:44","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/10\/recovery-painfully-slow-as-new-orders-plummet\/"},"modified":"2025-03-10T08:11:44","modified_gmt":"2025-03-10T13:11:44","slug":"recovery-painfully-slow-as-new-orders-plummet","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/10\/recovery-painfully-slow-as-new-orders-plummet\/","title":{"rendered":"Recovery \u201cpainfully slow\u201d as new orders plummet"},"content":{"rendered":"
\n

Construction sector recovery is still \u201cpainfully slow\u201d with a sharp fall in new orders, despite marginal growth pointing to markets having turned the corner, according to a major consultant.<\/p>\n

In its market view for Spring, Arcadis warned that a weakened pipeline meant a sustained recovery was by no means certain, pointing to a drop in new orders of almost 20 per cent since July.<\/p>\n

It said that in the short-term, workload and employment had increased, with an 18-month slowdown in new build workload finishing with a one per cent increase in output in the Autumn.<\/p>\n

However, industry confidence and the forward pipeline were a cause for concern that made any meaningful recovery unlikely before the end of this year.<\/p>\n

The findings echo the latest S&P Global UK Construction Purchasing Managers\u2019 Index (PMI) data, released last week, which warned of steep declines in housing and civil engineering<\/a>, with residential construction particularly subdued.<\/p>\n

Simon Rawlinson, head of strategic research and insight at Arcadis, said that although the construction sector had reached a turning point, the outlook remained uncertain, with a weakening future pipeline representing a serious worry.<\/p>\n

\u201cNew orders have dropped sharply, and while infrastructure investment is set to rise, commercial and residential recovery remains sluggish due to low confidence and high finance costs,\u201d he said.<\/p>\n

\u201cThe shift towards low-rise residential schemes highlights ongoing regulatory challenges, while resource constraints in the resilience sector could drive inflationary pressures.<\/p>\n

\u201cWithout renewed investor confidence and strategic government action, a sustained recovery is far from guaranteed.\u201d<\/p>\n

The analysis said that the timing of public investment in building projects was dependent on June’s comprehensive spending review and local government devolution, leaving developers with limited options to overcome viability constraints.<\/p>\n

There was a risk that local government investment could be disrupted as funding shifted to combined authorities, it said.<\/p>\n

However, the report predicted a surge in infrastructure investment following Ofwat\u2019s confirmation of a major expansion in water programmes.<\/p>\n

There was optimism that the resilience sector as a whole could prove an emerging driver of activity, although pressures on labour and supply chains could undermine delivery.<\/p>\n

Meanwhile, the transport sector was at a crossroads, with major planning decisions on Lower Thames Crossing and airport expansions expected to drive private investment.<\/p>\n

Overall prospects for growth has deteriorated significantly over the past six months, with the result that the UK had very few regional hotspots, the analysis found.<\/p>\n

Markets that remained above trend tended to be working through legacy programmes secured in the past, it said.<\/p>\n

From a workload perspective, the strongest regional markets were the North East, Yorkshire and the Humber, London and Wales, areas which had seen no change since the start of last year.<\/p>\n

There were six \u2018not spots\u2019 where workloads over the last two years had been below the long-term average.<\/p>\n

These included the South West and East, both of which had seen a 20 per cent decline in housing but were now in recovery, and the South East, which was in the early stages of a housing-led renaissance.<\/p>\n

Also struggling were the North West and West Midlands, which had lost steam despite having fairly strong markets post-pandemic, and Scotland, which appeared to have more persistent market weaknesses and may have been overly dependent on the infrastructure sector.<\/p>\n

In the wake of last week’s PMI data, experts in the sector were already striking a pessimistic note.<\/p>\n

Brian Smith, head of cost management and commercial at Aecom, said that while construction output had persevered valiantly to deliver continued growth in recent months, the gloom that had fallen over the broader economy since the autumn appeared to have finally caught up.<\/p>\n

\u201cDespite the well-known challenges in key sectors like housebuilding, the positive view is that the trajectory of interest rates is creating a more certain environment for developers and funds to press on with investment elsewhere,\u201d he said.<\/p>\n

Nevertheless, contractors would be looking ahead to the Spring Statement, due later this month, with trepidation.<\/p>\n

\u201cWhile areas like defence infrastructure are benefiting from increased spending, wider government and local authority investment plans are likely to come in for scrutiny as the Chancellor looks to balance the books to meet her own fiscal rules,\u201d said Smith.<\/p>\n

Lauren Pamma, head of energy & infrastructure at Aldermore Bank, said that with higher inflation figures reported last month, businesses were struggling to cover rising costs of supplies, while rising energy, fuel and wage costs continued to hamper growth.<\/p>\n

\u201cThe government\u2019s investment in infrastructure and commitment to increasing housebuilding targets will benefit the industry, but the ongoing uncertainty around cross-border tariffs could disrupt supply chains moving forwards and impact the sector and knock growth prospects more widely,\u201d she said.<\/p>\n<\/div>\n

Read More<\/a>
\n Kerry Lorimer<\/p>\n","protected":false},"excerpt":{"rendered":"

Construction sector recovery is still \u201cpainfully slow\u201d with a sharp fall in new orders, despite marginal growth pointing to markets having turned the corner, according to a major consultant. In its market view for Spring, Arcadis warned that a weakened pipeline meant a sustained recovery was by no means certain, pointing to a drop in<\/p>\n","protected":false},"author":1,"featured_media":832883,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22277,22246],"tags":[],"class_list":{"0":"post-832882","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-painfully","8":"category-recovery"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/832882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=832882"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/832882\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/832883"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=832882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=832882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=832882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}