Outlook healthy in Wales despite downturn

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Civil engineering is holding up against the economic downturn in Wales and smaller house builders are doing well in social housing, according to industrial bodies.

Major civils schemes are still continuing in Cardiff and Swansea as well as in the north of the country. Projects include Swansea's £675 million St David's 2 development and Swansea Bay alongside the M4 scheme backed by the Welsh Assembly and the £11 million contract installing a new capped roof on two nuclear reactors at Trawsfynydd.

Keith Jones, director at the Institution for Civil Engineers in Wales, said: "Construction has not slowed in Wales – civil engineering is the most prolific in the construction sector."

However, Rhodri Jones, director of the Civil Engineering Contractors Association in Wales, said there would be even more work if highways projects were not being delayed.

Firms are still awaiting news from the Welsh Assembly on its trunk road programme worth tens of millions of pounds each year, which would have normally been detailed by now. A new transport strategy is being drawn up and is expected to go out to consultation by Christmas.

Mr Jones added that a slowdown in local authority sector civil engineering work as councils devise regional transport plans was also having an effect, although firms were benefiting from a Welsh Assembly Government funding shift to health and education.

As part of the Welsh Health Estates Framework, the Assembly plans to allocate around £170 million per year of capital money over the next 10 years to construct new healthcare facilities across the 15 NHS trusts in Wales.

"[Health and education contracts] do provide us with some shelter as there is some civils work such as groundwork. We are seeing the tightening of belts," said Mr Jones.

Housing developments are being cancelled or put on hold in areas from Bridgend – where one 1,500-home development has stalled – to Cardiff Bay, but ongoing retail developments such as those in Cardiff are providing some insulation. But the drive to improve social homes is helping fuel demand for small-to-medium-sized firms.

Simon Lovell-Jones, director of the National Federation of Builders in Wales, said members were getting business improving social homes that have to meet the Welsh Quality Housing Standard by 2012.

"Clearly the larger house builders are feeling it the hardest but its not all doom and gloom. Local authorities are putting many, many millions of pounds improving their homes."

Analysis: Health, housing and education top Welsh agenda

By Andrew Brewer

The public sector in Wales is currently buoyant and social housing remains particularly strong. The Welsh Quality Housing Standard, combined with the recent stock transfers of Rhondda Cynon Taff Council and Torfaen Council to RCT Homes and Bron Afon respectively, are continuing to provide work for construction professionals.

For example, a number of contractors have recently been appointed to complete maintenance and upgrade work on social housing stock, in line with the deadline for the Welsh Quality Housing Standard in 2012.

As well as healthcare, education is another strong area for construction, with regional contractors continuing to win large
framework agreements with local authorities and universities.

There are a number of large-scale projects taking place across Wales which are continuing to provide work for professionals in the commercial sector such as the St David's 2 project in the heart of Cardiff, which aims to transform the southern end of the city.

While we have seen an increase in the number of candidates from the residential market, high calibre project and site managers, commercial managers and engineers are still hard to find.

Employers need to work hard to sell the benefits of joining their organisation in an uncertain financial climate.

Andrew Brewer is a manager at Hays Construction