North East's construction sector growing again after being hit hard by the recession

Construction firms in the North East proceed with caution as industry picks up after being hit hard by the recession

John Dickson from Owen Pugh
John Dickson from Owen Pugh

North East construction companies have given a cautious welcome to figures that suggest the sector is finally on the up, after being hit hard by the recession.

The Office for National Statistics (ONS) says the industry grew almost 5% between April 2013 and April 2014. In April this year, construction output rose by 1.2% compared with the previous month.

Insolvency trade body R3’s latest assessment also found the proportion of construction businesses in the region with a higher than normal risk of insolvency fell by 2.3% last month to just under 31%.

John Dickson, chairman of the Owen Pugh Group, a regional civil engineering contractor, said the news was a “welcome sign that the long, deep recession in the construction industry in the North East is coming to an end”.

“It is undeniably the case that there is more optimism around and workloads across the industry are improving,” he said.

“The industry still faces some challenging circumstances, however, including shortages of skills and resources in some parts, combined with shortages of workload in others.”

The region, he added, must pull together to ensure sustainable growth.

Dan Robinson. chairman of Gus Robinson Developments, likewise suggested celebration should be tempered with caution.

“We are experiencing a marked upturn in the amount of opportunities for business in both the immediate region and beyond,” he said.

“After a long, deep rooted recession, I have no doubt that we are beginning to feel the benefit of government fiscal policy. There are still many challenges for the industry, however, including upwards pressure on materials and wages.

“I would also stress that emerging from such a recession, companies must be prudent in the way they manage the growth opportunities in front of them.”

Director of Surgo Construction Jeff Alexander said there was certainly more confidence in the market place.

“We are obviously hopeful that these are the first signs of a sustained upturn in regional construction activity,” he added.

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