Construction firms are sceptical of growth rise
Aug 16 2010 by John Hill, The Journal
CONSTRUCTION firms in the North East are sceptical of news of a recovery in the sector despite figures showing the biggest quarterly rise in output for nearly half a century.The Office of National Statistics has released figures showing the total volume of construction output rose 8.6%, above the estimate of 6.6%.
This marked the largest rise since 1963, but the ONS and companies in the sector pointed out that this compared with a first quarter hit by wintry weather and warned against a similar spike in the third quarter.
Richard Brown, managing director of Newcastle’s Dorin Construction, said: “The first quarter was frozen and nothing happened so it’s easy to demonstrate growth in comparison. I think we’re past the worst of it, but the market is still flat as a pancake.”
Brown added that while the industry was suffering as a whole, the North East was particularly reliant on public projects.
He said: “There is no private money, and there won’t be until the banks start lending. It’s a case of riding it out and taking a long-term view.”
CITB-ConstructionSkills North East regional strategy adviser Terry Hanlon warned the annual Construction Skills Network report projected 0.6% growth each year for the North East, behind the national level of 1.7%. He backed the government’s re-allocation of £150m to fund 50,000 apprenticeship places for SMEs, a rise from 20,000.
He said: “Currently around 23% of the region’s skilled workforce travels outside of the area for work, creating a skills drain in the North East.
“We must support our home-grown companies, through training and up-skilling, cultivating a sustainable workforce and offering support to new talent coming in to the industry. Only by keeping those opportunities local to our region can we ensure that we help a generation of young people who are not employed or in education and training to find work on their doorstep.”
John Dickson, executive chairman of Northumberland building firm Owen Pugh, said the firm had a reasonably-full order book, but added price levels were low because of competition.
He said: “The industry has seen some recovery, but if we’ve made maybe 4% back, that’s still about 21% lower than it was before the catastrophic slide.
“The North East construction sector was hit harder than almost anywhere else in the country and when you look further south there’s a lot of Highways Agency money being spent as well as work on the Olympics and Crossrail and that has no effect up here whatsoever. When you go to meetings in London the atmosphere in the industry is very different.
“A lot of apprentices have been laid off mid-course. There’s not much room for younger people to get in.”
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