Builders' hopes are dashed by fragile upturn

THE RECOVERY in the building market has failed to meet expectations, with a further 44,000 net job losses over the past 18 months, according to the Building Employers Confederation. The BEC said inquiries on new houses and repairs and maintenance fell in the third quarter and any upturn was patchy and fragile.

Sir Bryan Hill, president, said: 'There is nothing like the recovery we reasonably anticipated at the beginning of the year, with demand in the housing market at a much lower ebb than expected.'

If the housing market was taken as an overall indicator of the state of the country, the Government had something to worry about, he said. 'There is no feel-good factor.'

Sir Bryan blamed lack of consumer confidence, worries over job security and the continuing problem of negative equity.

The recent rise in interest rates had exacerbated the problem, creating yet more uncertainty in the minds of consumers, he said. There was evidence that visits to new housing sites fell after the interest-rate rise.

The latest quarter also showed that orders and inquiries from industry are picking up more slowly than hoped. Sir Bryan said he was surprised and concerned that industry was not investing in new buildings to the level that had been expected.

The bright spots are the commercial and public sector non- housing markets, including schools and hospitals.

Inquiries and orders in those markets grew very strongly, with the result that a third of BEC members said overall output grew in the third quarter while almost 60 per cent said it remained constant.

Sir Bryan said members' expectations for the rest of 1994 and for next year were encouraging but the BEC still had reservations. With the exception of Wales, increasing output expectations are held by companies of all sizes and across all regions.

The BEC said it was making little progress in re-employment in an industry that has lost 500,000 jobs since mid-1989. 'We will not see any significant increase in jobs until there is a significant increase in confidence,' Sir Bryan said.