Builders note improvements

Prospects for the construction industry are improving, although still fragile, according to a survey published yesterday by the Building Employers Confederation, writes Diane Coyle.

The steady improvement in the housing market has continued, while the commercial and industrial sectors reported big increases in output in the latest quarter.

The proportion of firms working at or near full capacity rose from 29 per cent in the second quarter of this year to 45 per cent in the third quarter. This was the highest since the end of 1989.

Paul Shepherd, BEC chairman, said: "There are definitely some encouraging signs in these results which go some way towards lifting the gloom that has affected the construction industry over such a long period."

There was even an improvement in employment prospects, he said, with the number of jobs in construction likely to increase in the fourth quarter. Industry output had risen by about 0.5 per cent in the third quarter, and there was an across-the-board rise in the numbers of employers reporting shortages of skilled labour, especially bricklayers.

However, companies with turnover below pounds 5m still appear to be struggling, while output fell in five out of 10 regions. In the previous quarter, the initial upturn was shared nationwide.