4th Quarter 2001 - Workload Trends Workload in the Fourth Quarter of 2001 As shown in Table 1 below, the proportion of all respondents to the FMB's fourth state of trade survey in 2001 reporting a rise in total construction workload in the latest three months is just under a third, compared with over a half in each of the two preceding surveys. However, with the proportion indicating a fall in workload only two percentage points higher than last time at 18% there is still a clear positive balance of 'higher' and 'lower' replies, indicating a further increase, quarter on quarter, in the workload of small and medium-sized building firms and specialist contractors. This is the tenth survey in succession in which the overall result from this question has been positive, although the latest weighted percentage balance of 'higher' and lower' replies is the lowest since the second quarter of 2000. For the first time since then the result for all specialist contractors taking part in the survey is clearly weaker than that for all builders. This is no great surprise, given that, as shown in Table 3, specialist contractors taking part in the third quarter survey were anticipating a decline in workload in the fourth quarter, whilst the builders were looking for some further rise in activity. In the event, the out-turn balances for the change in total construction are all ahead of the balances of expectations expressed last time. For four regions the result is clearly better than that for the country as a whole. They are the North of England and Wales, both of which recorded negative balances last time, along with East Anglia and the North West. For all of these except East Anglia the result is well ahead of the expectations expressed in the third quarter survey.
Table 1 - Change in Total Construction in the Last Quarter   2000 2001 Fourth Quarter 2001   Weighted % balance Weighted % balance Weighted percentage   Q4 Q1 Q2 Q3 Higher Same Lower Balance North +17 +35 0 -15 51 29 20 +31 Yorks & Humber +40 +13 +23 +27 30 46 24 +6 East Midlands +65 +60 +32 +69 32 36 32 0 East Anglia -20 +1 +36 +44 37 59 4 +33 London +41 +12 +60 +2 24 62 14 +10 South East +22 +49 +35 +36 22 48 30 -8 South West +29 +18 +19 +27 31 57 12 +19 West Midlands +26 +31 +57 +60 34 47 19 +15 North West +7 +9 +55 +48 41 50 9 +32 Wales +71 +54 +29 -26 34 59 7 +27 Scotland +27 +22 +90 2 91 7 -5 Northern Ireland -73 +88 -35 All builders +27 +24 +36 +35 32 51 17 +15 All specialists +25 +35 +44 +33 28 52 20 +8 England & Wales +28 +27 +38 +35 32 50 18 +14 UK +26 +39 +35 31 51 18 +13
There is considerable slippage in the results for both the East and West Midlands, although the latter is still showing a positive result, and for Scotland, where more than nine out of ten report no change between the third and fourth quarters. For both Midlands regions, a slowdown had been anticipated last time, after indications of relatively strong growth from the previous four surveys. Whilst this proposition cannot be properly tested by reference to the survey results alone, it seems that the slowdown may be linked to skill shortages. In the section on the labour market it is noted that the East and West Midlands this time exhibit the two highest proportions of firms reporting difficulty in obtaining skilled labour. There is another modest positive balance of 'higher' and 'lower' replies from firms working principally in London, but that for the rest of the South East is negative for the first time since the regional analysis was re-based on standard regions in 2000, although within the South East the result is still positive for firms working principally in the Berkshire, Buckinghamshire, Hampshire and Oxfordshire segment of the region. Again, these results are not significantly out of line with previous expectations.
Table 2 - Changes in Construction Workload by Type of Work   2000 2001 Fourth Quarter 2001   Weighted % balance Weighted % balance Weighted percentages   Q4 Q1 Q2 Q3 Higher Same Lower Balance Housing:                 Private new +6 0 +18 +27 20 61 19 +1 Private RM&I +16 +14 +30 +24 20 71 9 +11 Social new -17 -17 -3 -3 34 50 16 +18 Social RM&I +17 +7 +19 -1 21 56 23 -2 Non-Residential:                 Public new build +10 +3 +3 +10 27 54 19 +8 Public R&M +12 +15 +15 +8 23 62 15 +8 Industrial -3 +17 +1 -3 23 56 21 +2 Commercial +16 +13 +10 +9 23 54 23 0 Private R&M +14 +20 +13 +19 19 66 15 +4
Turning to the analysis by type of work, the strongest result this time is that for new construction of social housing. This is the first occasion since the introduction of weighting that the result for this sector has been positive. It should be borne in mind, however, that this is the sector for which the proportion of FMB survey respondents indicating involvement is the lowest, at fewer than 30% in this survey. By comparison, the highest proportion is that for repair, maintenance and improvement of existing private housing, in which 66% of respondents are engaged. For this type of work the weighted percentage balance of 'higher' and 'lower' replies is positive for the eleventh survey in succession, although the result this time is the weakest since the first quarter of 2000, and a little weaker than the balance of expectations expressed three months ago. For all non-residential building sectors, except new construction and refurbishment of commercial buildings for private sector clients, the reported change in workload is positive and a little ahead of what was expected last time. Finally, there are indications of a very slight drop in RM&I of social housing, just as was anticipated in the third quarter survey. Expected Workload in the First Quarter of 2002 Looking ahead into 2002, a quarter of all respondents anticipate a further increase in their total workload in the first three months of the year, whilst just over a third are looking forward to a downturn. There is only the narrowest possible negative balance of 'higher' and 'lower' replies from the builders, but a very pronounced negative one for the specialist contractors.
Table 3 - Expected Changes in Workload in the Next Quarter   2000 2001 Fourth Quarter 2001   Weighted % balance Weighted % balance Weighted percentage   Q4 Q1 Q2 Q3 Higher Same Lower Balance North -10 +52 -10 -24 13 63 24 -11 Yorks & Humber +15 +19 +12 -4 29 29 48 -19 East Midlands +10 +13 +3 +10 10 38 52 -42 East Anglia -18 +41 +66 +21 16 51 33 -17 London +20 +18 +18 +15 31 47 22 +9 South East +5 +52 +22 0 21 38 41 -20 South West +4 +22 +18 +3 37 38 25 +12 West Midlands +1 +33 +23 +3 26 38 36 -10 North West -13 +42 +65 0 18 45 37 -19 Wales +28 +56 +59 -19 28 53 19 +9 Scotland +20 +30 +18 23 46 31 -8 Northern Ireland +18 +6 -35 All builders +6 +31 +25 +10 30 39 231 -1 All specialists -16 +56 +38 -17 9 45 46 -37 England & Wales +4 +37 +28 +5 25 41 34 -9 UK +37 +27 +5 25 41 34 -9
Looking back over the results of all the FMB surveys since the methodology was changed, to include weighting of replies by size of firm, at the start of 1999 it would appear that this result represents no more than an expectation of the normal seasonal downturn at this time of year. As may be seen from Table 3, a year ago the weighted percentage balance of 'higher' and 'lower' expectations was +4, and in the fourth quarter 1999 survey it was -9, with a lower level of expectations among specialist contractors than among builders on both occasions. By region, only among firms operating principally in London, the South West, and Wales is there any expectation that the first quarter of 2002 may see a further rise in work. Results for the other regions are fairly closely grouped, with the exception of that for the East Midlands, where only one in ten anticipates a rise in workload, and a little over half are looking for a decline. However, within the South East there is a positive balance of 'higher' and 'lower' replies from firms operating principally in the Berkshire, Buckinghamshire, Hampshire and Oxfordshire segment, offset by a modest negative result for Kent, Surrey and Sussex, and a very poor one from Bedfordshire, Essex and Hertfordshire, where only 3% expect workload to rise. By type of work, there are negative balances of 'higher' and 'lower' expectations in all sectors of the market except new build and refurbishment of non-residential buildings for public sector clients, for which nearly a quarter of all respondents working in the sector anticipate an increase in work.
Table 4 - Expected Changes in Workload, by Type of Work   2000 2001 Fourth Quarter 2001   Weighted % balance Weighted % balance Weighted percentages   Q4 Q1 Q2 Q3 Higher Same Lower Balance Housing:                 Private new -12 +23 +15 -3 14 62 24 -10 Private RM&I -2 +21 +19 +16 14 68 18 -4 Social new -22 +14 +1 -28 10 65 25 -15 Social RM&I +5 +6 +7 -2 12 64 24 -12 Non-Residential:                 Public new build 0 +20 +3 -7 24 55 21 +3 Public R&M -5 +15 +9 -1 13 68 19 -6 Industrial -17 +9 +9 +1 14 67 19 -5 Commercial -3 +23 +6 +9 17 58 25 -8 Private R&M -8 +10 +5 -11 10 72 18 -8 Otherwise the 'higher' proportions are all in the range 10%-17%, whilst those looking for a fall in work range from 18% up to 25%; but the result for expectations in respect of commercial work is the weakest since the adoption of the present survey methodology at the start of 1999.
First posted: 1 February 2002. Last modified: 4 February 2002.