Workload Trends - 3rd Quarter 1999 1. Workload in the Third Quarter of 1999 The balance of weighted percentages of survey respondents reporting their total workload higher or lower in the third quarter of 1999 was +14, 15 points better than each of those recorded in the first and second quarters, and 16 points better than the balance of unweighted percentages in the 1998 third quarter survey. The figure for those reporting workload higher rose from 29% last time to 38% this, whilst that for firms with lower workload fell from 30% to 24%. As already mentioned, interpretation of these figures requires that some allowance be made for building workload being normally higher in the third than in the first or second quarters of any year. In time it will be possible to measure the normal variation, and adjust the figures accordingly. For now the fairest interpretation is that the underlying trend in total workload in the July-September quarter was at least level, or it may have been slightly up.
Table 1 - Change in Total Construction in the Last Quarter   1998 results 1999 1999 Q2   % balance, not weighted Q1 Weighted percentages   Q2 Q3 Q4 balance Higher Same Lower Balance Northern -26 0 +10 -28 27 30 43 -16 North West +8 +2 -13 +5 11 63 26 -15 Yorkshire & Trent -9 -8 -12 +9 37 30 33 +4 Midlands -3 +1 -8 -20 21 32 47 -26 Eastern -11 -11 -9 -18 44 43 13 +31 London -8 -1 +11 +15 43 42 15 +28 Southern +12 -4 -20 +28 26 44 30 -4 South West +7 +13 -10 +4 27 38 35 -8 South Wales -29 -20 -15 -21 15 43 42 -27 All builders       +3 33 43 24 +9 All specialists       -13 13 35 52 -39 National -4 -2 -9 -1 29 41 30 -1
What is very clear from Table 1, however, is that there was again a wide difference of experience between the builders taking part in the survey, and the specialist contractors. The balance for the latter was better than that of -39 recorded in the second quarter survey, but no better than that of -13 for the January-March quarter. Only one in five of the carpenters and joiners, electrical contractors, roofing contractors and other specialists taking part in the survey reported an increase in workload, compared with one in three reporting some further decline. Eastern Counties again shows the strongest balance, five points better than in the second quarter at +36. The figure for London Region slipped back seven points to +21, and was overtaken by a 23-point improvement in the balance of firms in Yorkshire & Trent. For all these three regions experience in the third quarter has been clearly better than was expected last time (see Table 4). Of the other regions, all except South Wales showed clear improvement, with relatively the largest swings in the northern regions and South West. Gains exceeded expectations everywhere except in the Southern Counties, where there was only a small difference between expectation and out-turn, and in South Wales where the change in activity has been very clearly negative, despite firms having expected a rise at the time of the last survey. The improvement in the Midlands was not quite enough to eliminate the clear negative balance recorded last time. Looking at the results by type of work, there are still negative percentage balances for both private and social housing new build, and also for repair and maintenance of both privately and publicly owned non-residential buildings. That for social housing new build is much better, but there was little improvement in that for public non-residential R&M, whilst in the other two sectors there was a slight deterioration compared with the second quarter.
Table 2 - Changes in Construction Workload by Sector   1998 results 1999 1999 Q2   % balance, not weighted Q1 Weighted percentages   Q2 Q3 Q4 balance Higher Same Lower Balance Housing:                 Private new -1 +1 -11 -13 18 62 20 -2 Private RM&I +21 +17 +2 0 29 51 20 +9 Social new -26 -19 -14 -7 7 50 43 -36 Social RM&I -10 -4 -12 -13 20 53 27 -7 Non-residential:                 Public new build -8 -8 -5 -21 20 46 34 -14 Public R&M -17 -7 -10 -33 19 53 28 -9 Private industrial -14 -23 -20 -12 16 52 32 -16 Private commercial -11 -16 -16 -3 25 50 25 0 Private R&M -7 +4 -10 -13 21 58 21 0
The principal advances were recorded in respect of the balances for new build and refurbishment work in the public non-residential, private industrial and private commercial sectors, and at last, after much discussion of the potential effects of the Government's Capital Receipts Initiative, in that for repair, maintenance and improvement of existing social housing. In all of these four areas the third quarter figures are better than was expected at the end of the second quarter. Only the out-turn for new private housing was worse than expected, and then only very slightly. 2. Expected Workload in the Fourth Quarter of 1999 Looking ahead to the final three months of the year, it is to be expected that there will be some seasonal reduction in workload, and this is reflected in the figures for FMB members' anticipated changes in workload. These are set out in Table 3, for the different types of work, and Table 4, for the regions and overall. In the first of these Tables it may be seen that there are negative percentage balances for all the four housing sectors, with that for social housing new build dropping to -50. However, the percentage anticipating higher workload in this sector is actually slightly higher this time than last (but that expecting a fall increased more substantially), and that expecting more social housing RM&I work is up from 12% at the end of the second quarter to 18% this time. The anticipated trend in private non-residential new build and refurbishment, including both the industrial and commercial sectors, is very slightly positive, and a little stronger than three months ago. Even allowing for the effects of the weighting of replies by size of firm, the expected trend in private non-residential new build and refurbishment appears stronger now than at the end of the third quarter of 1998, but for other sectors the figures are quite similar.
Table 3 - Expected Changes in Workload, Next Quarter, by Sector   1998 results 1999 1999 Q2   % balance, not weighted Q1 Weighted percentages   Q2 Q3 Q4 balance Higher Same Lower Balance Housing:                 Private new +9 -12 -22 +15 23 55 22 +1 Private RM&I +13 +3 -8 +9 22 65 13 +9 Social new -9 -26 -27 -21 11 63 26 -15 Social RM&I -6 -12 -21 -8 12 61 27 -16 Non-residential:                 Public new build -1 -9 -23 -12 15 60 25 -10 Public R&M -5 -13 -17 -6 13 64 23 -10 Private industrial -12 -26 -23 -11 17 63 20 -3 Private commercial -2 -20 -19 -3 21 63 16 +5 Private R&M +1 -5 -22 -2 12 70 18 -6
Looking at the results by region and by trade, the first point to note is the continuing gap between the expectations of the builders and the specialists. The proportions of each category expecting workload to be higher are very much the same, but the proportion of specialists looking forward to a fall is ten points larger at 38%. However, as the specialists provide only one in five of all respondents, the -5 overall balance, compared with +7 last time, is not far removed from that of -3 for the builders. Around the regions, and apart from South Wales where respondents continue to take a very optimistic view of the outlook despite previous disappointments, only the Southern Counties still displays a positive weighted percentage balance of those expecting workload to rise or to fall in the October-December quarter. For London Region, the South West, and also Yorkshire & Trent, the negative balances are very small, but respondents in the Northern Counties, North West and Midlands all have a less optimistic outlook, as also do those in the Eastern Counties which display relatively the largest change in their balance of expectations compared with that shown last time, just larger than the swing in Yorkshire & Trent.
Table 4 - Expected Changes in Construction Workload by Region and Trade   1999 1999 Q2   Q1 Weighted percentages   balance Higher Same Lower Balance Northern +12 19 39 42 -23 North West -20 21 65 14 +7 Yorkshire & Trent +37 42 32 26 +16 Midlands -13 19 51 30 -11 Eastern +16 26 56 18 +8 London +30 34 43 23 +11 Southern +30 30 57 13 +17 South West +23 43 30 27 +16 South Wales -6 34 43 23 +11 All builders +15 31 48 21 +10 All specialists +13 27 46 27 0 National +14 30 47 23 +7
First posted: 19 October 1999. Last modified: 21 January 2000.