A series of positive news from construction companies and the banking sector has provided a much-needed ray of light for the building materials supply industry.
Bovis Homes today said its private house reservations were up 71% in the first 17 weeks of 2009 compared with a year ago, with a 40% reduction (400 homes) in its unsold stock.
Costain’s forward order book increased 20% during the same period to £2.4bn record. The company has preferred bidder positions worth more than £800m, with £900m of revenue secured for 2009 – ahead of last year.
Property repair and maintenance specialist Rok reported it had secured 15 new framework agreements worth £350m during the first four months, compared with £250m a year ago. Its total forward order book, including long-term framework agreements, stands at £2.7bn, up from £2.3bn.
All this on a day when influential BBC business editor Robert Peston said on Radio 4’s Today programme that he thought the banks had turned the corner and were probably past the worst of their problems.
He said today’s announcement by Barclays of a 15% increase in profits and the improved capital position of banks like Lloyds mean they should be able to remain solvent even if the recession worsened.
Recently released NHBC housing stats are also encouraging. They show the first quarter-on-quarter rise in applications to start new homes for almost two years. Some 16,232 applications were received by the NHBC during the first quarter, up from 15,866 in the fourth quarter of 2008.
This is against a background of declining house prices; Halifax reports a 1.7% decline in April, with prices now at the same levels as five years ago.
However, both the Construction Products Association (CPA) and Federation of Master Builders (FMB) have warned that construction product suppliers and small builders are continuing to be pounded by the recession.
CPA chairman Adrian Barden told 400 industry guests at the organisation’s annual lunch that “the worst was far from over”, with no signs of serious recovery until 2011. The FMB said 73% of its members reported a decline in workloads during the first quarter.
