but still fall a little behind that

of the wider Construction

Industry . Since growing

throughout 2021 , the annual

‘ Historic Sales Volumes ’ on

balance has fallen back but

still shows a healthy increase

over the year to date and

BY PHIL SLINGER CAB CHIEF EXECUTIVE

of Storm Dudley , Eunice and

Franklin , losing more days

than usual over the period ,

but some other businesses

will have picked up repair and

maintenance work following

the storms .

Despite the effects of the

weather , material shortages

continue to dog the industry

coupled with higher costs

which are particularly affecting

the smaller businesses .

Good news is that demand

continues to be strong with

construction orders increasing

by 9.2 % in the final quarter

of 2021 compared to quarter

three 2021 .

It is not clear yet what the

effects of the war in the Ukraine

will have on UK Construction .

The CAB CPA State of the

Trade Survey was completed

by members in April so there

may be an influence within the

collated data .

‘ Historic Sales Volumes ’ for

CAB Members , on balance , has

doubled over the last quarter ,

slightly ahead of the wider Construction Industry .

‘ Expected Sales Volumes ’ for CAB Members , on balance , is at its highest on a quarterly basis with 92 % on net balance expecting an increase in sales in the second quarter of 2022 . Whilst not at its highest over the last year , ‘ Expected Sales Volumes ’ for the year ahead is reported at a healthy increase of 77 % on net balance of Members . This closely follows the expected growth of the wider Construction Industry .

‘ Sales Volumes - Quarteron-Quarter ’ show a further slowing of growth for CAB Members in the last quarter compared to 2021 . Whilst still positive , Members reporting ‘ Sales Volumes ’ up by over 5 % have halved over the year to 46 % of reporting Members . ‘ Sales Volumes - Year-on-Year ’ are broadly positive with only 8 % of Members stating sales had decreased over the last year .

Confirmation , if any is needed , comes through clearly in the survey regarding Historic Unit Costs and Expected Unit Costs . On net balance all members of CAB and the wider Construction Industry has

incurred increased costs and anticipate costs to increase further in the next quarter and the year ahead .

Breaking down the ‘ Cost Factors ’, whilst ‘ Raw Materials ’ remained at a high level during 2021 , 92 % of Members in quarter 1 continue to suggest further increases . The first quarter of 2022 also shows that ‘ Energy Costs ’ and ‘ Fuel Costs ’ have further risen to match that of the ‘ Raw Materials ’, which is closely followed by ‘ Wages and Salaries ’. These increases will no doubt continue to fuel increased building costs and lead to further pressure on inflation .

The ‘ Likely Constraints on Activity Over the Next 12 Months ’ shows an improving situation over the last year when 42 % of members reported in Q2 2021 that ‘ Material Supply ’ would be a constraint , now falling to 23 % in the last quarter . Demand remains the highest ‘ Likely Constraint ’ as reported by 46 % of the Membership . With ‘ Historic Capacity Utilisation ’, the proportion of Members who are reporting

over 90 % Capacity Utilisation , peaked in Q3 2021 at 44 % for the previous quarter and 50 % for the previous year . This has fallen over the last quarter to just 23 % for both the last quarter and year . This suggests a slowing of sales output which could be attributed to both the last quarters storms and the shortage of materials . The wider Construction Industry is reporting 45 % ‘ Capacity Utilisation ’ which would suggest new starts on site which will eventually lead through to Members sales .

Expected Capacity Utilisation by CAB Members is cautious with only 38 % forecasting over 90 % Capacity Utilisation for the month and year ahead . With the wider Construction Industry forward view also cautious , this could suggest a slowing in UK construction output .

‘ Labour Costs ’ remain at their highest level with increases over the last year and 85 % of all respondents on balance claiming future increases .

www . c-a-b . org . uk

42 JUNE 2022

CLEARVIEW-UK . COM