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Civil engineering contractors' workload continues to fall - survey shows

Third quarter results from the Civil Engineering Contractors Association Workload Trends Survey show that the market decline continues for civil engineering contractors.

July's survey of the second quarter of 2008 saw long sustained growth in workloads go into reverse. Expectations for the following twelve months also weakened sharply.

October has seen a continuation of those adverse trends but while the movement is largely negative, the rate of deterioration is much slower than it was three months earlier.

The downward trend continues in overall workload and in all areas of work apart from railways and harbours. Weakness was most evident in preliminary works and gas with communications, airports and electricity faring little better.

There is a marked difference in workload for larger and smaller contractors. The largest (employing 600+) reported a positive balance of + 6% by contrast to the -20% recorded in the previous survey. Likewise, those employing 300-599 reported a negative balance of - 11% in October, which suggests a slower rate of deterioration than the -26% recorded in July.

By contrast those firms employing fewer than 300 employees reported a faster rate of deterioration than they had in July and now appear to be reflecting considerably worse trading conditions than the larger businesses.

The forward looking workload and employment indicators show further deterioration in October but by nowhere near the extent shown in July. However, the results for the expected trends in new orders offer little suggestion that throughout the country the trade cycle is not going to worsen in the coming months. The data for October are worse for both new work and R&M than they were in July.

CECA director Rosemary Beales said: "This survey confirms the poor market situation faced by civil engineering contractors in the current economic climate.

"Although the situation is showing a less steep decline than in the previous survey, the overall picture reinforces the view already held in the industry that there are difficult times ahead.

"The sharp decline in house building has had a heavy impact, primarily on smaller contractors, but now with only harbours and rail actually reporting a positive trend in workload, the impact is being felt across the sector.

"It is essential that the major projects currently proposed are delivered and that a robust programme of investment in infrastructure is maintained. A further steep decline in workload resulting in redundancies will mean a loss of vital skills. Cut back now and construction will cost more as those skills have to be replaced when the market recovers."

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