Workload Trends - 3rd Quarter 2000 1. Workload in the Third Quarter of 2000 The overall proportion of FMB survey respondents reporting an increase in workload in the third quarter 2000 is 45%, compared with 36% in the second quarter. With only 18% indicating a decline, the weighted percentage balance of replies is +27 in favour of an increase in work. This is 16 points better than at the end of the preceding three months, and 30 points ahead of the balance of -1 for the third quarter 1999.
Table 1 - Change in Total Construction in the Last Quarter   1999 2000 Third Quarter 2000   wtd % balance wtd % balance Weighted percentage   Q3 Q4 Q1 Q2 Higher Same Lower Balance Northern 44 52 4 +40 Yorkshire & Humberside 65 30 5 +60 East Midlands 41 47 12 +29 East Anglia 43 51 6 +37 London 51 34 15 +36 South East 57 25 17 +40 South West 46 38 16 +30 West Midlands 16 52 32 -16 North West 38 35 21 +11 Wales 11 22 67 -56 All builders +9 +20 +15 +14 45 37 18 +27 All specialists -39 -13 +5 -9 47 29 24 +23 National -1 +14 +12 +11 45 37 18 +27
One notable feature of the result this time is the very much improved balance of replies received from the specialist contractors, that make up around a fifth of the total response to the FMB survey. The trend in workload of this group has previously lagged behind that for the builders, principally because the proportion of specialists reporting a decline in work has been higher, whilst that indicating an increase in work has kept up. The 'lower' proportion for specialists remains higher in the latest result, at 24% compared with 17% for builders. However, with 47% of specialists saying they had more work in the third quarter than the second, the balance of their replies is +23, just five points less than the builders' figure, and no less than 32 points better than last time. The first breakdown of results by standard region rather than FMB region - which means that there are no past regional results for comparison in Table 1 or subsequently in Tables 4, 5, 7, 8 and 9 - finds only three regions in which the proportion of firms indicating a rise in work is lower than the overall 45%. The figure for the North West is not much lower than that. However, those for the West Midlands and Wales are only 16% and 11% respectively, and are clearly exceeded by the proportions reporting a drop in work in those regions. There is no evidence of any 'special factor' at work in the West Midlands but, judging by written-in comments, the very poor result for Wales is due largely to a reducing flow of home improvement grants through local authorities. The proportion reporting workload higher in the third quarter is highest amongst firms working mainly in Yorkshire & Humberside, then amongst those working mainly in the South East, but outside Greater London. As far the latter are concerned, however, it should be added that the result is much weaker for firms working mainly in Bedfordshire, Essex and Hertfordshire than for those in the remainder of the region.
Table 2 - Changes in Construction Workload by Sector   1999 2000 Third Quarter 2000   wtd % balance wtd % balance Weighted percentage   Q3 Q4 Q1 Q2 Higher Same Lower Balance Housing:                 Private new -2 -5 +8 +5 26 56 18 +8 Private RM&I +9 +12 +13 +13 31 60 9 +22 Social new -36 -7 +1 -23 10 67 23 -13 Social RM&I -7 +6 -3 -6 35 53 12 +23 Non-residential:                 Public new build -14 +3 0 -23 27 51 22 +5 Public R&M -9 -5 +3 -22 37 37 26 +11 Private industrial -16 +10 -8 +7 35 41 24 +11 Private commercial 0 +18 +8 -2 31 46 23 +8 Private R&M 0 -2 +5 -3 34 51 15 +19
Indications of trends in different types of work are mostly positive, with replies for repair, maintenance and improvement (RM&I) of private housing again producing the strongest balance. Only for social housing new build does the proportion reporting a decline exceed that reporting a rise in workload. In considering these figures, it should be remembered that there is no adjustment of FMB survey results for normal seasonal fluctuations in activity, and it is to be expected that workload will show an increase between the second and third quarters, as days lengthen and the weather improves. Commenting on the results of the second quarter survey, it was suggested that FMB survey respondents were expecting a slightly stronger improvement than is normal. In the event, the third quarter out-turn is clearly better than was expected three months earlier, and definitely indicates something more than the normal seasonal up-swing in activity. Comparison of the latest figures, in Tables 1 and 2, with those for second quarter expectations that are recapitulated in Tables 3 and 4 below, shows that for builders there is relatively little difference between the out-turn balance and the balance of expectations expressed three months earlier. By comparison, however, the latest result for specialists is considerably better than expected. By type of work, the out-turn results are ahead of what was anticipated at the time of the second quarter survey for housing RM&I, both private and social, and all non-residential building work apart from new build and refurbishment for public sector clients. The out-turn balance for social housing new build is -13, which is again disappointing, but is also an improvement on the balance of expectations expressed last time. The one sector in which the result is a bit poorer than expected is private housebuilding, the +8 out-turn balance for which is less than half the +17 balance of expectations three months earlier. 2. Expected Workload in the Fourth Quarter of 2000 By reference to normal seasonal fluctuations in construction activity, some slowdown in building activity is to be expected between the third and fourth quarters, moving into the winter months. However, on this occasion there are still 27% of all respondents looking for a further increase in their total workload in the October-December quarter, which is three points ahead of the proportion expecting their activity to decline. At +3, the overall balance of workload expectations is marginally weaker than in the third quarter 1999. Builders' expectations are divided symmetrically this time, with 25% 'higher' and 'lower' either side of half the sample anticipating no change, whereas a year ago the proportion in this group looking forward to a rise was 10 points ahead of that anticipating a fall. Amongst specialists, however, there is slightly greater optimism this time, with over a third looking forward to an increase in workload in the coming quarter, whilst only 20% anticipate a decline.
Table 3 - Expected Changes in Workload, Next Quarter, by Sector   1999 2000 Third Quarter 2000   wtd % balance wtd % balance Weighted percentage   Q3 Q4 Q1 Q2 Higher Same Lower Balance Housing:                 Private new +1 -14 +28 +17 23 62 15 +8 Private RM&I +9 -3 +24 +18 19 71 10 +9 Social new -15 -36 +1 -26 12 70 18 -6 Social RM&I -16 -6 +23 +9 20 65 15 +5 Non-residential:                 Public new build -10 -12 +13 +2 21 59 20 +1 Public R&M -10 -10 +13 +1 21 55 24 -3 Private industrial -3 0 +3 -4 14 66 20 -6 Private commercial +5 +5 +19 +2 18 63 19 -1 Private R&M -6 +8 23 +2 14 67 19 -5
Expectations of the trend in workload over the coming three months remain stronger for private housing, both new build and RM&I, than for either social housing or non-residential building work. As may be seen in Table 3, the difference in the weighted percentage balances of replies arises principally from fewer firms anticipating a decline in private housing work than is the case for other sectors, as opposed to more firms expecting an increase. There is again a negative balance of expectations of the trend in social housing new build, although it is one that is much less pronounced than last time. The balance is also negative for four of the five non-residential building sectors, compared with only one at the end of the second quarter. In none of these cases, however, is the latest balance any more than seven points down on the last one, which is not a large degree of change.
Table 4 - Expected Changes in Construction Workload by Region and Trade   1999 2000 Third Quarter 2000   wtd % balance wtd % balance Weighted percentage   Q3 Q4 Q1 Q2 Higher Same Lower Balance Northern 31 65 4 +27 Yorkshire & Humberside 25 56 19 +6 East Midlands 36 61 3 +33 East Anglia 34 59 7 +27 London 30 32 38 -8 South East 28 46 26 +2 South West 15 58 27 -12 West Midlands 31 41 28 +3 North West 55 18 27 +28 Wales 11 50 39 -28 All builders +10 -3 +34 +25 25 50 25 0 All specialists 0 -15 +30 0 35 45 20 +15 National +7 -5 +34 +19 27 49 24 +3
Where expectations for the fourth quarter are concerned, results by region are more variable than those for the actual change in workload in the third quarter. Apart from Wales, where there is no expectation of any improvement, the three weakest results are those for London and the South West, both showing expectations of a slight downturn in work, and that for the South East. As far as the last of these regions is concerned, its balance also would be negative if it were not for a relatively strong positive result for respondents working mainly in Kent, Surrey and Sussex. In the other segments of the South East, no firm in Bedfordshire, Essex or Hertfordshire anticipates an increase in work over the next three months, and only 3% of those in Berkshire, Buckinghamshire, Hampshire and Oxfordshire do so.
First posted: 25 October 2000. Last modified: 25 October 2000.