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Private sector falls leave new orders at lowest level in nearly 30 years

The latest figures for new construction orders do not make encouraging reading for the HVAC sector.

They fell to their lowest level since 1982 last year when adjusted to 2005 prices, according to figures released by the Office of National Statistics.
The total value of construction new orders fell to £49.64 billion in 2009, compared with £48.76bn in 1982, ONS figures show.

Private housing new orders fell to £5.64bn in 2009, falling from a recent peak of £15.7bn in 2005.

The scale of the fall hit the industry hard, with most of the largest housebuilders tapping shareholders for money to help repair balance sheets as credit disappeared. The industrial sector has also suffered as demand for factories and warehouses has declined.

During 2009, new orders in the sector were also at their lowest level in 40 years, falling to £2.5bn from a peak of £10.8bn in 1969.

As has been well documented, the commercial sector collapsed during the recent recession.

The full scale of this can be seen in new order figures, which were at their highest level since the 1960s in 2007, touching £31.1bn.

But orders in the sector fell to £13.1bn in 2009, a fall of 58 per cent in just three years.

Given the rise in public sector spending on construction over the past 10 years, it is no surprise to see that new orders in this sector were at their highest level since 1976, ending 2009 at £14.2bn.

While 2009 marked a low point for a number of sectors in the industry, the outlook is still very weak and further falls in new orders cannot be ruled out.

Analysis shows that over the life of the next parliament, government capital spending will be £123bn less than it would be if it was maintained at current levels.

The sectors hardest hit will be transport, education and housing, according to this analysis.


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