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Confidence drops despite output growth

THERE HAS been a sharp fall in construction industry confidence despite continued growth in output, according to a Construction Confederation survey published on Monday.

The Construction Trends Survey reported that 28% more contractors surveyed by the CC have reported an increase in output during the third quarter of 1998 than a decrease. This compares to a balance of 21% in the previous quarter.

But despite a tenth successive quarter of growth there is clear evidence of a drop in confidence in the industry, suggesting that growth in construction output could soon peak.

For the first time since 1996 more companies reported a drop in enquiries than an increase. The survey shows most expect output to fall in the next quarter.

Civil engineering contractors reported a fall in new infrastructure work for the fourth consecutive quarter and expect the decline to continue, although infrastructure repair and maintenance increased marginally.

Construction Confederation chairman Sir Martin Laing said. 'We expect a slow-down in the next quarter because of a weak private sector and nervous consumers. The economic outlook is worsened by international events and a further worsening of the international economy could push the UK into recession.'

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