Construction output rises again in April, despite fastest fall in housing activity since May 2020

• Total construction activity rises for third month running

• Commercial work is the best-performing segment

• House building declines at sharpest pace for almost three years

UK construction companies remained in expansion mode during April, but the latest survey data indicated uneven growth across the sector. Rising volumes of commercial work and civil engineering activity helped to offset the steepest decline in residential construction output since May 2020. Meanwhile, supply conditions improved to the greatest extent since September 2009, reflecting an upturn in materials availability and fewer instances of transport delays. Input price pressures also eased in April, with the rate of cost inflation the lowest for almost twoand-a-half years.

At 51.1 in April, the headline seasonally adjusted S&P Global / CIPS UK Construction Purchasing Managers’ Index® (PMI®) –which measures month-on-month changes in total industry activity – was up slightly from 50.7 in March and above the neutral 50.0 value for the third month in a row. However, the latest reading signalled only a marginal overall expansion of construction activity.

Commercial building was the fastest-growing area of the construction sector in April (index at 53.9), with improving economic conditions helping to boost clients’ willingness to spend. The rate of expansion was the secondstrongest since October 2022, although survey respondents again cited a growth headwind from squeezed client budgets and elevated cost inflation.

Civil engineering activity (index at 52.0) also picked up in April, supported by resilient pipelines of work on infrastructure projects. House building was by far the weakest-performing segment in April (index at 43.0). The rate of decline for total residential work was the steepest for nearly three years. Survey respondents commented on delays to new house building projects, alongside constraints on demand from softer market conditions and higher borrowing costs.

New orders received by construction companies increased for the third consecutive month in April. The rate of expansion accelerated slightly since March and remained faster than seen on average in the second half of 2022. Higher levels of new work were attributed to resilient client demand, especially for commercial building. Rising construction activity and forthcoming project starts contributed to a moderate increase in employment during April. Input buying also expanded, albeit at only a marginal pace. Some construction firms noted that efforts to reduce inventories had acted as a constraint on purchasing activity during the latest survey period. Meanwhile, supply chain improvements continued in April. Lead times among vendors shortened to the greatest extent for just over thirteen-and-a-half years. A combination of improved supply and relatively subdued demand helped to alleviate cost pressures across the construction sector. The rate of purchase price inflation was the slowest since November 2020 and broadly in line with the long-run survey average. Construction companies anticipate a further increase in business activity during the year ahead, but the degree of confidence edged down to a three-month low. Around 44% of the survey panel forecast a rise in output in the next 12 months, while only 13% expect a fall. Survey respondents mostly commented on optimism due to resilient client demand. Some firms nonetheless noted concerns about subdued housing market activity, rising interest rates, and the uncertain economic outlook.

• TIM MOORE, Economics Director at S&P Global Market Intelligence, which compiles the survey said: “The construction sector stretched out its current phase of expansion to three months in April, signalling a modest rebound from the downturn seen at the turn of the year.

Commercial building work continued to outperform, helped by stabilising domestic economic conditions and a gradual rebound in business confidence. Civil engineering activity was also a driver of construction growth during

April, with rising infrastructure work contributing to the best phase of expansion in this segment since the first half of 2022.

“However, the return to growth for UK construction output appears worryingly lopsided as residential work decreased for the fifth successive month. Extended delays on new housing starts were reported again in April, due to a considerable headwind from elevated mortgage rates and weak demand. While there have been some signs of a recent stabilisation in market conditions, this has yet to feed through to construction activity. In fact, the latest reduction in residential building was the fastest since May 2020.

“On a more positive note, the latest survey illustrated a further slowdown in input price inflation across the construction sector. Softer cost pressures partly reflected a sustained improvement in supply chain performance, with lead-times for deliveries of products and materials shortening to the greatest extent since September 2009.”

• DR JOHN GLEN, Chief Economist at the Chartered Institute of Procurement & Supply (CIPS), said: “The mixed picture found in the UK construction industry in April is representative of an economy still trying to recalibrate after being buffeted by the manifold challenges of political instability, lockdowns and supply chain pressures.

“The growth in the construction of commercial properties is welcome news, with the avoidance of a recession in the last quarter leading to clients being more willing to spend. The significant easing of supply chain disruption, with delays reduced and materials more readily available, also helped to alleviate cost pressures on the sector.

“However, the sharp decline in UK house building in April will be a cause for concern, as it becomes clear that the recent interest rate rises will continue to hamper consumer demand for some time to come. With a further rate rise expected there will be concerns that things will get worse before they get better for UK house builders.” www.spglobal.com

MR STEPHEN WEST (c/o Agent: Mark Geraghty, HSSP Architects Limited, Pera Business Park, Nottingham Road, Melton Mowbray, Leics. LE13 0PB) – Erection of 3 dwellings (Resubmission) – at rear of 348 Humberstone Lane, Leicester LE4 9JP.

UNNAMED APPLICANT (c/o Agent: Richard Sykes, Lower Farm, The Common, Corley Moor, Coventry.) – Change of use of first, second and third floors from retail and assorted office space to 1 flat and 18 studio flats – at 137 Harrison Road, Leicester.

WYGGESTONS (c/o Agent: Alfie Symons, Corporate Architecture, 1 Trimbush Way, Rockingham Road, Market Harborough, Leics. LE16 7XY) – Redevelopment of land to the south of Wyggeston Hospital to provide 8 one-bed cottages and one two-bed cottage – at Wyggestons Hospital, 160 Hinckley Road, Leicester LE3 0UX.

DEVELOPMENT AND LAND

LIMITED (c/o Agent: Mr Will Seymour, Marrons Planning, 2 Colton Square, Leicester LE1 1QH) – Full planning application for the demolition of the existing industrial buildings and the redevelopment of the site to create 42 apartments within a five-storey apartment block – at 140 Queens Road, Leicester LE2 3FX.

LEICESTER CITY COUNCIL

CAPITAL PROJECTS (c/o Agent: Mrs Amy Cawley, Hickman & Smith Architects, LCB Depot, 31 Rutland Street, Leicester LE1

1RE) – Demolition of the existing covered market roof and café and construction of a new covered roof to provide 80 market stalls, 16 new single storey lock up trading units, and a new single storey café – at Leicester Market, Market Place, Leicester LE1 5GG.

LOCATION

MR M ALIMAHOMED (c/o Agent: Muhammad Imtiaz, Architecture365 Limited, 20 Lynmouth Road, Leicester LE5

• Half of builders view late-paying customers as the greatest single threat to their business, double the number most concerned by falling customer demand

• A third of construction contractors have downed tools in a bid to force customers to settle up, and over a quarter have had to threaten legal action

• New analysis by the payment provider Lopay reveals 50% of builders have struggled to pay for materials and 30% have turned away work because of the late payment “epidemic” and refused to resume work until an outstanding invoice is paid, and more than a quarter (28%) have threatened legal action in order to get a customer to settle up. new research by the payment provider Lopay has revealed.

Lopay, which is a partner of the National Federation of Builders, analysed the experiences of small construction firms across the UK and found that half (50%) ranked late payment as the greatest danger to their business. That’s twice as many as the proportion who see falling demand as the biggest threat (24%) and nearly triple the number most concerned by the rising cost of materials (18%).

The research also revealed the lengths builders have to go to when chasing up late-paying customers. A third (34%) have downed tools

The findings come after official statistics showed that 4,165 construction firms went bust in England and Wales in the year to the end of March, the highest level since the Financial Crisis.1 Construction sector demand fell sharply over the same period, with new orders across the UK falling 5.7% year-on-year and 12.4% in the first quarter of 2023 alone.2 At 19% of all company insolvencies, construction accounts for more business failures than any other sector of the economy. Lopay’s research reveals the strain that late payment is putting on builders’ finances; 70% of those polled said their cashflow has been

impacted by clients failing to pay on time.

Half (50%) of builders said they have struggled to pay for materials and 30% have been unable to take on new work as a result of latepaying clients, with a further 8% missing a loan repayment or vehicle lease payment.

In response, many builders have changed the way they take payment. While two thirds still send a final invoice to the customer when the work is completed, 58% take a deposit before starting work and 28% now take card payments in person at the end of each week.

Richard Carter, Founder of Lopay commented: “When times are tough, keeping on top of your cashflow is the difference between life and death for small businesses. Nowhere is this truer than in construction, where the epidemic of late payment is pushing many contractors to the edge.

The land is located on the south side of Nanpantan Road and on the western edge of Loughborough itself.

1NA) – Change of use from house to 2 self-contained flats plus construction of dormer extension at front and rear – at 92 Prestwold Road, Leicester LE5 0EX.

The site currently forms part of the grounds to the Nanpantan Scout Hut and and is conveniently placed having access to all amenities in the town centre, Loughborough University and a number of scenic walks including Jubilee Wood and Beacon Hill.

VIEWINGS & DIRECTIONS

By calling on site or by appointment through the Selling Agents, Andrew Granger & Co telephone 01509 235534.

ANDREW GRANGER & Co are offering for sale a single building plot of 1,060 square yards with Outline Planning Permission (ref: P/21/2444/2) for a one detached dwelling and a double garage.

Leave Loughborough town centre via Forest Road continuing over its junction with Epinal Way and eventually leading into Nanpantan Road. The building plot is then situated on the left hand side immediately after the Scout Hut and will be clearly identified bearing our For sale board.

PLANNING NOTE

The plot – adjacent to the Scout Hut, Nanpantan Road, Loughborough, Leics. LE11 3YE – is being offered at a guide price of £275,000. Call 01509 235534 for further information.

Outline Planning Consent was granted by Charnwood Borough Council on 15th July 2022 for the erection of one detached dwelling and garaging (Application number P/21/2444/2).

“Lopay gives builders an easy way to take payment on the spot, or collect deposits in advance, rather than waiting weeks for the customer to make a bank transfer. This allows builders to get paid as soon as the work is completed, ensuring they don’t end up out of pocket and don’t waste every Friday afternoon chasing unpaid invoices.

“And because our fees are less than a third of those charged by the big beasts of the card payment industry, Lopay allows builders to keep more of the money they make on every job.”

FULLHURST COMMUNITY

COLLEGE (c/o Agent: Mrs Vicky Burton, Bsurv Limited, 6 Layton Park Drive, Rawdon, Leeds LS19 6PH) – Demolition of existing canopy within courtyard and construction of single storey extension within courtyard to increase the size of the dining room – at Fullhurst Community College Fosse Campus, Ellesmere Road, Leicester LE3 1BE.

MRS S SULEMAN (c/o

Agent:Masterplan Design Limited, First Floor, The Vicarage, 1 Woodhill, Leicester LE5 3JB)

- Demolition of annex and development of 2 new four-bed dwellings - at 313A Scraptoft Lane, Leicester LE5 2HU.

MS GURBAX KAUR CLAIRE

(c/o Agent: Mr Muhammad Imtiaz, Architecture365 Limited, 20 Lynmouth Road, Leicester LE5 1NA) - Change of use from house in multiple occupation to 5 selfcontained flats - at 339 Saffron Lane, Leicester LE2 6UE.

A KATARIA & P LAKHANI (c/o

Agent: Mr Dennis Dziko, Volta Designs, 71-75 Shelton Street, Covent Garden, London WC2H 9JQ) - Notification of change of use from offices (Class E) to four flats (4x1 Bed) (Class C3) - at 32 De Montfort Street, Leicester LE1 7GD.

CODE STUDENTS LIMITED

(c/o Agent: Mr Chris May, Howes Percival, 3 The Osiers Business Park, Laversall Way, Braunstone Town, Leicester LE19 1DX)

- Reconfiguration of existing student accommodation office to create 2 student studios - at 7274 Western Road, Leicester LE3 0GE.

CODE STUDENTS LIMITED

(c/o Agent: Mr Chris May, Howes

Percival, 3 The Osiers Business Park, Laversall Way, Braunstone Town, Leicester LE19 1DX)

- Reconfiguration of existing student accommodation office to create 9 additional student studios - at 72-74 Western Road, Leicester LE3 0GE.