There has been much comment about how the 5.2% fall in construction output in the second quarter of 2012 has resulted in an overall 0.7% fall in the UK’s GDP.

The over-riding impression is that the fall in construction output is primarily a result of public spending cuts. The impact of the record rainfall has evaded analysis but anecdotal evidence increasingly suggests that the weather impact could be a primary cause, meaning that construction activity has only been postponed rather than eliminated.

Travis Perkins chief executive Geoff Cooper said this morning: “Whilst weather patterns normally average themselves out over any trading period, it has been difficult to ignore the impact on the results of the first half trading of the wettest three months since records began. This has inhibited construction activity and particularly constrained turnover in our heavy-side related businesses in a market already struggling to recover to more normal levels.”

Earlier this month block paving producer Marshalls attributed £10m of lost sales to the weather, prompting a £7m corporate restructuring.

Travis Perkins’ interim results, out today, show that revenue was down 0.7% on a like-for-like basisat £2,412m. Adjusted profit before tax was up 7.3% to £137m.

Commenting on these figures, Construction Products Association economics director Noble Francis said: “Given the sharp effects of public sector spending cuts over the past 12 months it is unsurprising to see that construction returned to recession in the first quarter with a fall of 3% following the 0.2% fall in Q4. Furthermore, with new orders for construction falling 14% in 2011, the industry is likely to endure further falls near-term. Our latest forecasts for construction anticipate that the industry will fall considerably this year and remain flat in 2013, severely delaying recovery for the economy as a whole.

“Given that independent economic analysis has shown clearly that for every £ spent in construction, £2.84 is generated for the wider economy, it is essential that government does its utmost to switch its current spending towards the more productive capital spending.”

Simon Rawlinson, head of strategic research at quantity surveyor EC Harris, said: “The latest GDP figures are clearly very disappointing. Construction was -3% for Q1 2012 and coupled with a revised figure of -2% for Q4 2011 means that the industry has contracted by 5% over the last half year. We have effectively lost the gains that were made in 2011 and repeated the pattern of 2010 when we saw a loss of 9.3% over a six month period.

“Most of the damage was down to poor performance during December and January, which is also a recurring trend to the previous year, when after a poor Q4 and Q1, the rest of the year we played catch up.

“Whilst it is impossible to say exactly where the drop has come from, if you look at the last construction output data, infrastructure was the only area that showed growth, with everything else static or falling.  It is likely that the public sector spending cuts are reflected in this figure, however.”

The Purchasing Managers’ Index (PMI) rose to 55.3 from 53.8 in February. Levels above 50 indicate expansion.

It follows similarly strong March surveys from the manufacturing and construction sectors.

The data points to first-quarter UK economic growth of 0.5%, according to Chris Williamson, chief economist at Markit, which produces the surveys.

The services sector – which dominates the UK economy – recorded its 15th consecutive month of expansion, according to the surveys, and its strongest quarter since spring 2011.

“Faster growth of services activity in March indicates that the economy is on the up again, skirting recession as business continues to bounce back from the lull seen late last year,” said Mr Williamson.

In other encouraging signs, the survey suggested that jobs were being created in the sector at their fastest pace in four years, with businesses optimistic about the outlook for the next 12 months.

Earlier this week, a separate PMI survey showed manufacturing sector growing at its fastest pace for 10 months in March, as factories cleared out a backlog of existing work and new orders also picked up.

Origina Source : BBC

Improved facilities for overseas and postgraduate students are planned by two-thirds of universities, it reports. Ian Vickers of Wates said higher fees meant higher demands from students.
The shake-up in higher education funding means that universities face increasing competition – with the financial viability of degree courses depending more than ever on their ability to recruit students.

Consumer appeal

It means that universities are having to pay more attention than ever to the so-called “student experience”.

And this includes the sleeping experience, with the quality of bedrooms identified as needing to be improved by one university.
The survey suggests that universities are stretching their budgets to construct image-boosting new buildings and to improve the quality of accommodation.
The lucrative overseas students market – where fees can be more than the £9,000 upper level for domestic students – appears to be a particular target.
Among the plans highlighted by Wates were one for an “international feeder college” and a purpose-built “overseas student village”.

A third of universities were considering much bigger plans, such as partnerships to set up science parks or to put a hotel on the campus.
The survey, with 52 responses, allowed the institutions to remain anonymous, but Wates said it was a representative sample of different types of university. There are more than 160 higher education institutions across the UK.

Among the plans was a university which wanted a joint venture which would see it sharing university grounds with a hotel, offices and private housing.
Another had turned down a proposal for a hotel because it would have been at the university entrance and might not have projected the desired image.
Because of the anonymised research, Wates says it is not possible to say whether these are hotels aimed at a university market – such as family visiting students – or whether they are simply commercial ventures making use of a campus or historic setting.

Mr Vickers said that such building plans were taking place despite the tough financial circumstances facing higher education.
“Students are being asked to pay more than ever before for a university degree. That means they expect a quality of experience that reflects the high price they are paying.

“In order to remain competitive, universities are therefore looking to deliver modern facilities that have the ‘wow’ factor while also encouraging more efficient and collaborative use of space.”

Original Source: BBC