State of the nation round-up

Published:  02 October, 2009

LONDON: The latest monthly figures on new orders for total construction issued by the Office of National Statistics reveal...

in the quarter, a fall of 9% to August, compared to the corresponding quarter one year earlier. Year to-date the new orders figures were 23% lower than the same period in 2008.

Orders in private housing in the quarter to August fell 22%, whereas public housing orders rose by 9% when compared to the same quarter in 2008.

Year to-date the new orders figures for private housing were 45% lower than the same period one year earlier and public housing orders were 16% lower than the same period in 2008.

Industrial orders fell 46% in the period, compared to the same quarter in 2008. Year to-date the new orders figures were 44% lower than the same period in 2008.

Commercial orders fell 44% over the three months to August compared to the same quarter one year earlier. Year to date the new orders figures were 44% lower than the same period in 2008.

Infrastructure orders rose 46% in the three months to August compared to the same quarter last year. Year to-date the new orders figures were 23% higher than in the same period in 2008.

Public non-housing orders showed a rise of 14% in the period, compared to the same quarter last year. The new orders figures were 12% higher than in the same period in 2008.

The housing market has started to see stability over the past few months with both the Halifax and the Nationwide recording house price rises in July, according to Homes and Communities Agency Housing Market Bulletin.

However, the fragility of this stability was illustrated by the fact that Rightmove recorded a 2.2% drop in asking prices in August. Mortgages increased by 23% in June over May, but remain historically low at less than half of their average number over the last seven Junes. Transactions remain low, having fallen by 42% over the past year according to the Land Registry.

Rents are now starting to increase after falling 5% over the past year. Buy-to-let loans have seen a substantial fall, falling by 73% over the past two years.

Housebuilders' trading statements have generally reported recent stability in the housing market, reductions in cancellation rates and debt levels. Housing starts by private enterprise were 79% up on the previous quarter in Q2 2009, but remain 12% down on a year earlier.

Bellway and Persimmon reported that conditions were more robust in the South of the country than the North and housing start figures reflect this with a much weaker performance in the North than the South.

Also according to Nationwide, UK house prices in September rose, for the fifth consecutive month, by 0.9% when compared to the previous month and are almost identical to the prices seen in September last year. A typical home now costs £161 816 compared to peak in October 2007 of £186,044.

The Bank of England announced that the total number of loans approved for house purchase fell to 52 317 in August 2009, compared to the previous month, the first fall in ten months. However, approvals are 63% higher than in August 2008.

Also from the Bank of England, mortgage lending has fallen in the third quarter of 2009 despite a rise in demand for it.

The reduced availability reflects a deterioration in the cost and availability of bank's own funds.

The latest Construction Products Association/Ernst and Young Activity Barometer for 2009 Q3 stated that the sale of construction products continued to fall despite the recent optimism in the housing sector.

The latest figures indicate that the majority of product manufacturers continue to experience a decline in sales.

Looking forward, both heavy and lightside manufacturers still anticipate further falls in sales in the final quarter of 2009 compared to a year earlier

For further information or a copy of the CPA's Barometer, contact Karan Mann.

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