Here’s a couple of articles about the situation in the Construction Industry in the United Kingdom (UK)

Below, you’ll see mention of an ABI Index. Don’t confuse this one with the U.S. AIA ABI Index.

Found at www.building.co.uk

CPA/Barbour ABI Index - 16 December 2011 | By Kelly Forrest

Kelly Forrest is a senior economist at the Construction Products Association

Contract awards for building projects increased in November according to the latest CPA/Barbour ABI building index. At 115, the overall building (excluding infrastructure) index was relatively strong, buoyed by an increase in commercial offices and retail contracts. Elsewhere, November’s results were more subdued. Public sector indices were lower than in November 2010 and private house builders remained hesitant.

This data provides an indication that 2011 has been better than anticipated. However, the timing between a contract award and the start of work on site can vary; furthermore, the start of the project can by no means be guaranteed.

Consumers, burdened by high inflation and uncertain job prospects, are wary. Trading prospects with our largest export market have not been strengthened as a result of David Cameron’s decision to distance the UK from Europe last week. The outlook is highly uncertain.

Here’s an earlier article that mentions the launch of the Index mentioned in the above article:

CPA/Barbour ABI Construction Index Launches As Part of Building Magazine’s Business Barometer – March 12, 2011

A new monthly index tracking construction activity (in the UK) has been launched by the Construction Products Association and Barbour ABI. The CPA/Barbour ABI Index provides the most up-do-date indicator of future workloads in the construction industry and will be published every month on the Business Barometer in Building Magazine and on the web-site.

The October (2011) Index of 108 reveals a marked decline in contract awards during the month as private sector demand wavered. Commentating (commenting) on the Index, Kelly Forrest, Senior Economist at the CPA, said, “The private sector has reacted quickly to the deterioration the economic outlook for the UK and the escalation of the euro zone crisis. Businesses are clearly thinking twice and opting to wait and see how the situation unfolds before choosing to invest. For an industry facing a downward step-change in public sector capital investment, this change in private sector sentiment is a real concern”.

Based on Barbour ABI’s comprehensive contract data, the CPA/Barbour ABI Index measures the volume of new construction orders. Every month, on the Building web-site, the CPA will provide expert analysis for the Index, and commentate (comment) on the number of contracts awarded in one particular sector.

Commenting on the significance of the Index, Forrest says, “The CPA/Barbour ABI construction indices provide an early indicator of future trends, much earlier than official data sources”.

Adam Valentine, Group Content Director at Barbour ABI says, “We have worked closely with our colleagues at the CPA to provide a robust and comprehensive index that tracks construction workloads from 2007, providing valuable historic data for anyone analyzing market trends. Economists and construction managers will benefit from a comprehensive overview of the market changes and detailed insights into sector-specific trends.”

Data for the last five years of the CPA/Barbour ABI Index is available on Building Magazine’s web-site.

Note from the blog-author: Before you go to Building Magazine’s web-site to look at the ABI Index data, pull out your credit card, as access to many of the articles (and the Index data) is not free!

Here's another recent article from Building Magazine's web-site:

Autumn statement response: A step forward but where to?

02 December 2011

Quite a package of interventions but an overall infrastructure vision is still missing, says Richard Threlfall, KPMG’s UK head of infrastructure

Major government announcements on the economy, infrastructure and construction are usually something of a footnote - but this week it was different.

Infrastructure investment took center stage in the autumn statement as the government’s antidote to lower growth forecasts and rising unemployment. The industry may remain skeptical about how quickly any of it will have an effect, but at least we feel loved.

None of the long list of schemes reeled off with relish by the chancellor are new in conception, but the government’s decision to reduce revenue spending and increase capital by £5bn over the next five years will allow a number of schemes to go ahead which had previously been frozen. The National Infrastructure Plan 2011 proudly lists over 500 schemes in the pipeline and 40 priority investments - a mix of specific schemes and some overarching programmes. (programs.)

A host of other measures were set out by the chancellor, which together comprise quite a package of interventions and stimulus in the UK construction market. An additional £1bn to go into the Regional Growth Fund, supporting smaller scale local schemes; £1bn of additional borrowing by Network Rail for rail schemes; a £400m fund for new housing starts to be funded from council house purchases; two new Enterprise Zones in Humberside and Lancashire and 100% capital allowances for certain Enterprise Zones.

The much trailed £20bn target investment of UK pension funds in UK infrastructure was touched on quite briefly, but not surprisingly. The government has in place its Memoranda of Understanding but no detail at all as to how this will work. Still, the aspiration is a good one.

So at least we now have a pipeline of projects, measures and commitments from the government to see them delivered. What is still missing is an overall infrastructure vision for the country that explains how the individual schemes relate to each other and secure the UK’s economic position in the global economy. Perhaps if we all ask nicely we will get that next year.