Green glimmers amid the gloom

9 March 2013


The Construction Products Association (CPA) is known for the pith and precision of its UK building market reports and for being strictly averse to any sugar-coating. As a result, in recent years they have made for some pretty grim reading. They have painted a picture of construction spiralling into depression, rather than recession, with no hints of a silver lining.

It didn't just put it in writing either. In 2009, when the long-haul severity of the slump was hitting home, CPA boss Michael Ankers gave a truly sombre speech to a muted Timber Trade Federation dinner. He got a round of applause but left some very long faces.

So when CPA chief economist Noble Francis was interviewed on the BBC Today programme this week by John Humphrys and delivered some positive news, bordering on good, it was definitely worth sitting up and taking note.

Construction orders, he said, rose 3% in the last quarter of 2012 over the third, and were 11% ahead of the same period last year. With overall output down 8% in the year, this was "much needed good news". And while the order rise will take longer to feed through into increased outputs in some areas of the sector, in private housing it should happen this year.

Mr Francis attributed the improvement to slowly improving consumer confidence, also reflected in February's 2.7% rise in retail sales, plus, in part, to government initiatives; the Funding for Lending, New Buy Guarantee and First Buy schemes. Mr Humphrys bristled at the thought of a positive outcome from government action and said most Funding for Lending cash had so far gone to more credit secure re-mortgagers and larger businesses, rather than the SMEs it was designed for. Mr Francis agreed, but said it was raising construction confidence overall, and that this would ultimately benefit smaller firms too. Other CPA provisos are that commercial new orders, while 10% up in the last quarter, are still 64% behind pre-recession levels, and infrastructure orders fell 15%. It also said that the pledged £11.3bn of government capital and infrastructure spending needed to be spent.

But, despite the "could do better" comments, the CPA stuck to its headline that there are "indications of cautious optimism for construction". Its more upbeat outlook was also borne out by recent reports from RICS, showing a rise in housing transactions, and the NHBC, which said new home registrations are 30% ahead of this time last year.

There was also positivity in the air at last week's UK Timber Frame and UK SIPs Association-backed Fabric First Conference, which focuses on why high-energy performance building fabric, and timber-based building fabric in particular, rather than convoluted renewables technology, provides the best route to low carbon construction.

In the associated exhibition area, several engineered timber systems specialists said that while times were still tough, there was a sniff of new orders in the air, with one receiving a "very strong" £1m enquiry at the event.

The outcome of the conference was encouraging too. Architects, engineers, housing associations and other specifiers all supported the fabric first approach, backed by offsite prefabrication where timber products and systems also score highly. With the government still committed to its 2016 zero carbon housing target and the longer-term goal of slashing UK carbon emissions by 80% by 2050, there was agreement too that, when the construction recovery really takes root, the pressure will be on to build more quickly, better and more sustainably. That again clearly puts timber in the frame.

Mike Jeffree