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Social housing turnover tumbles

Social housing starts declined by 21 per cent this year, according to statistics released by industry monitor Glenigan as the sector continues to take a battering

In the first seven months of this year, £3 billion of social housing projects started on site, compared with £3.9 billion for the same period last year.

Allan Wilen, Glenigan economics director, expects project starts to be squeezed further over the coming year.

He said: ‘While a firm rise in planning approvals in the run up to the general election highlights the growing pool of projects that could potentially go ahead, many of these schemes will be subject to review and delay as the government reassess its funding priorities.

‘This has already been reflected in an 18 per cent drop in the value of projects securing detailed planning approval during the second quarter of 2010.’

The figures have been released as PRP Architects revealed its turnover plunged by a fifth.

The top 10-ranked AJ100 practice, which employs around 130 UK architects reported a turnover of £20.4 million in the year to March 2010, £5.7 million less than the year before.

Andy von Bradsky (pictured right), chairman of PRP Architects, said: ‘It’s a reflection of what’s happened in the market and we are obviously a good barometer.

‘A lot of projects were put on hold [though] some have returned through Kickstart funding. Also [there has been] a slowdown in decision-making in big PFI housing projects.

‘It’s an uncertain future and we are still yet to see how budget cuts affect the industry and impact on macroeconomic issues, which affect the decisions on which developers operate.’

Von Bradsky declined to reveal the scale of redundancies at the practice, but said: ‘Quite a lot have chosen to work flexibly, to leave the industry or to make [different] lifestyle choices.’

The company’s profits have, however, increased from £152,250 to £540,650, due to ‘restructuring’ a year ago, which saw staff drop from 383 in 2008 to 292. The practice has seen more enquiries from private clients, and an increase in work in Russia.

Meanwhile, share prices of architecture giant Archial fell 70 per cent in the last month, with the practice issuing a profit warning last week.

Archial made a £4.3 million pre-tax loss in the period up to June, with turnover down £4 million to just over £18 million.

Fall in second-quarter orders says Office for National Statistics

Britain’s building industry was facing a bleak future today after construction orders suffered a dramatic 14% fall between April and June.

The slide was led by public and private housing orders - down 23% and 24% respectively - and is the biggest slump outside of a recession over a single quarter since 1987.

The Office for National Statistics (ONS) figures come despite construction output soaring 8.5% during the second quarter - the sector’s best performance since 1982.

The sudden fall sparked grim warnings from the industry over the rocky road ahead as Chancellor George Osborne’s savage spending review looms next month.

Construction Products Association economics director Noble Francis said: “Today’s figures clearly highlight that the increase in construction output during the second quarter does not represent a sustained recovery.”

Alasdair Reisner, industry affairs director at the Civil Engineering Contractors Association, added: “This is a reality check for the industry. It’s pretty grim out there.”

Although the ONS stresses that the figures can be volatile, construction orders have held firm above £13 billion for the previous three quarters before the sudden plunge to £11.6 billion.

A host of building projects have been put on hold or scrapped since the election - including schemes under the Government’s Building Schools for the Future project - with more likely to feel the axe next month.

The spending uncertainty has hit companies such as social housing and maintenance firm Connaught.

The ONS figures showed orders falling across all sectors except private sector industrial projects.

Public sector infrastructure orders - such as roadbuilding - were down 22%, the biggest fall since 2004.

The gloom comes after the Chartered Institute of Purchasing and Supply’s latest activity survey for August showed construction growth slowing for a third successive month, with housebuilding much weaker than commercial construction and civil engineering.

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