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January 17, 2011 10:22 pm
The value of new building projects across the UK plunged 30 per cent during the last three months of 2010, as the dual strains of reduced government spending and the bitter start to the winter weighed heavily on the beleaguered construction sector.
The combined value of new starts on homes, offices, schools and hospitals, fell to £4.9bn for the three months to January, compared to £6.9bn during the same period in 2009.
The year end traditionally ushers in a lull in building activity. However, the slowdown was compounded by the snow and ice that blanketed much of the country during December, preventing builders and suppliers from reaching sites and laying concrete.
“There has been a fall in workloads, but the rate of year-on-year decline has been exaggerated by the fact that a lot of projects, particularly government- funded ones, were being pushed through at the end of 2009,” said Allan Wilen, economics director at Glenigan, which produces a monthly index on construction activity.
Spending on education and health projects dropped 30 per cent and 21 per cent respectively. However, large-scale civil engineering projects were worst affected, with the value of work falling 50 per cent.
The slowdown in pre-Christmas demand is a worrying sign for the construction sector, with the insipid levels of activity during last winter’s coldest months precipitating a string of insolvencies.
● Costain has secured the contract to build the first traffic-bearing bridge across the river Thames in 20 years, as the government looks to cut congestion in the west London suburbs.
The £32m scheme, which will link the Surrey towns of Walton-on-Thames and Shepperton, was signed off on Monday to replace two temporary bridges that carry 34,000 cars on weekdays.
Andrew Wiley, chief executive of Costain, said the construction and infrastructure company was delighted to be building the bridge across the river that bisects the capital and added that he hoped it would boost local trade.
Costain’s shares, which have gained 10 per cent during the past month, closed up 1¼p at 226¼p.
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