Construction on the turn
Published: 28 February, 2013
Housebuilders are reporting the start of 2013 as their strongest since the onset of recession in 2007.
Barratt chief executive Mark Clare described the first eight weeks of 2013 as the strongest start to a year 2007. But he said it was too early to say whether the “very strong” start would feed through to more definite housing market recovery. “We have seen comparable strong periods before [since 2007] that have faded. We’ll have to see if this continues to know whether it’s a turning point.”
Builders’ merchant Travis Perkins said the challenging construction market “may begin to turn” later this year after the company maintained revenue and profits in 2012.
Mr Clare said that a slowly improving mortgage market was the main reason behind the improvement, with Barratt also benefitting from strong marketing and a greater number of new sites opening with land bought since after the credit crunch.
Barratt’s forward sales are currently 21.4% higher than at the same point last year, with average site reservations increasing by 4.9% in the first eight weeks of the year on the same period in 2012. Clare said prices were nevertheless stable, and that the strong market would only feed through to higher prices if it was sustained over a much longer period of time.
Barratt’s figures for current trading are similar to those reported by other housebuilders in the last week, but Mr Clare is the only one to describe the market as the strongest since the credit crunch.
Industry bodies have called on the chancellor to boost construction in his forthcoming budget, through a range of measures including increased capital spending on repairs and maintenance and fresh drive to improve the energy efficiency of buildings.
In submissions to the Treasury ahead of the chancellor’s budget on 20 March, the Institution of Civil Engineers, the Construction Products Association, the Federation of Master Builders, and the Civil Engineering Contractors Association all called for the government to boost economic growth by supporting the construction industry.