Business roundup

Construction output is forecast to increase 5.5% this year before slowing to 4.0% in 2016 and 3.4% in 2017 because of an Election hangover Construction Products Association has said. Its economics director Noble Francis said:  “Construction output is forecast to increase 5.5% in 2015, which is more than double the rate of growth for the UK economy, due to growth in the three key sectors of construction; private housing, commercial and infrastructure. Over the following two years, however, construction output is forecast to be adversely affected by the UK’s most uncertain election in more than 40 years. “The lag between construction contracts and work on the ground means that construction activity in 2015 probably won’t be impacted, since the majority of work for the year has already been planned. Instead, we expect a break in private and public investment this year for future projects, which in turn will lead to slower construction growth of 4.0% in 2016 and 3.4% in 2017.”

Labour shortages are intensifying according to the latest RICS Construction Market Survey. Figures for Q1 2015 also show workloads are continuing to rise. Some 63% cited labour shortages as an issue followed by 55% highlighting finance.While workloads continue apace across all sectors, the private sector remains the principal driver of growth, with 48% of respondents reporting a rise in housing workload activity and the commercial sector also seeing a strong rise in workloads in Q1.

The rate of economic growth halved in the three months to the end of March, the slowest quarterly growth for two years, with construction output falling by 1.6%. Uncertainty created by the General Election was one underlying reason for the construction fall, commentators said. The UK economy grew by 0.3% in the quarter, the Office for National Statistics (ONS) said. This compared with 0.6% in the last three months of 2014. The economy was 2.4% larger than the same period last year, the ONS said.

Demand for commercial property in the UK is growing close to its fastest pace since 1998 and, along with a surge in investment, reflects the widening economic recovery, according to the latest RICS Commercial Market Survey. In Q1 2015 the UK saw its 10th consecutive quarterly acceleration of demand for commercial properties, with 46% more respondents seeing greater interest. 

Amey has been selected to deliver a £235M contract to provide environmental and infrastructure services for Trafford Council. The contract will run for 15 years, with a potential extension of eight years, and the firm is charged with delivering major savings for the council through innovative service delivery, including £2.25M million in 2015/16. Mel Ewell, Amey’s Chief Executive, said: “Trafford Council is taking a pioneering approach to the way services are provided and we are delighted to be working with them on this contract. Combining services allows us to support Trafford Council with efficiency savings whilst ensuring a high quality service is delivered to local residents.”

Waterman Group has extended its framework agreement with London Borough of Bexley to provide engineering and consultancy services. The deal is worth £1.5M to Waterman in its first year. The contract is part of the long-term regeneration framework of the borough’s growth strategy for its economic, environmental and social regeneration and aims to strengthening Bexley's reputation as a desirable location to live and do business, with plans to expand its transport infrastructure and education programmes while encouraging high aspirations and entrepreneurship.

Laing O’Rourke-Interserve has dropped out of bidding for the Midland Metropolitan Hospital which is to be the first hospital to be built using the PF2 model. Carillion is now the sole bidder, with final bids due in six months time. Sandwell & West Birmingham NHS Trust has said that the procurement process would continue to the same timetable even though one firm was left to price the £350m, 670-bed hospital. Construction of the new hospital is expected to start in 2016 and be completed by 2018-19.