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Construction output falls

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RISING costs and uncertainty relating to Brexit are to blame for the sharp drop in output growth in January 2019, the Federation of Master Builders (FMB) has said in response to the latest Purchasing Managers’ Index data (PMI).

The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager’s Index incorporates survey results provided by construction firms throughout the country.

A reading above fifty suggests the construction sector is expanding, while a reading below fifty suggests the construction sector is in contraction.

The January 2019 PMI data revealed a fall from 52.8 in December to 50.6 in January, against the neutral reading of 50.0. January data pointed to a loss of momentum for the UK construction sector, with business activity growth grinding to its weakest for ten months.

All three categories of construction output recorded weaker trends than those reported in December.

Residential work was the strongest performing area, although the latest expansion was only modest and the slowest seen since March 2018. Civil engineering activity increased marginally, with the rate of growth much softer than December’s 19-month high.

Commercial work was the weakest performing area of construction output in January. Latest data indicated a decline in work on commercial construction projects for the first time in ten months. Anecdotal evidence suggested that Brexit-related anxiety and associated concerns about the domestic economic outlook continued to weigh on client demand.

New business growth eased to an eight-month low in January.

Construction firms widely commented on softer demand conditions and longer sales conversion times, reflecting a wait-and-see approach to spending by clients. Concerns about the near-term outlook for new projects resulted in more cautious staff hiring policies at the start of 2019. The latest survey pointed to the slowest rise in employment numbers since July 2016.

However, construction firms remain positive about the outlook for business activity in 2019. Around 41% of the survey panel anticipate a rise in output, while only 16% forecast a fall.

Optimism had, however, fallen month on month. Large-scale civil engineering projects were cited as a key source of optimism, while Brexit uncertainty was the most commonly cited concern.

Tim Moore, Economics Associate Director at IHS Markit, which compiles the survey: “UK construction growth shifted down a gear at the start of 2019, with weaker conditions signalled across all three main categories of activity.

“Commercial work declined for the first time in ten months as concerns about the domestic economic outlook continued to hold back activity.

“The latest survey also revealed a loss of momentum for house building and civil engineering, although these areas of the construction sector at least remained on a modest growth path.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “The sector suffered a sharp drop in output growth in January, and the softest rise in purchasing volumes since September 2017, as Brexit continues to hamper progress and dampen client confidence.

“The biggest shock came in the form of job creation which has managed to suffer the slings and arrows of Brexit highs and lows with solid hiring since the referendum result. Employment rose at the slowest rate since July 2016 and with optimism also in short supply, the sector only needs a small nudge to tip it closer to a recession.”

Commenting on the results, Brian Berry Chief Executive of the FMB, said: “The latest PMI data show a slowdown in growth in construction with business activity growth easing to its weakest for ten months. The ongoing political uncertainty is partly to blame for this setback.

“Political uncertainty is the enemy of construction firms that rely on the spending power of homeowners to commission home improvement projects. The UK is set to leave the EU next month, and yet we are still none the wiser about what the future holds. Given these intense headwinds, it should not be surprising that the sector suffered such a sharp decline.”

Mr Berry continued: “Alongside the political uncertainty, the cost of doing business is also rising for construction firms up and down the country. Material prices have been rising steadily since the depreciation of sterling following the EU referendum.

“Looking ahead, material prices are expected to continue to cause a headache for the construction industry with recent research from the FMB showing that 87% of builders believe that material prices will rise in the next six months. What’s more the construction skills crisis means that key trades are extremely difficult to recruit and the upshot of this is rising wages in construction.

“Tradespeople know they can command higher salaries than they did previously as workers are scarce, and this means a squeeze in margins for firms. This will only worsen if the post-Brexit immigration system that the Government has planned goes ahead.

“If the sector isn’t able to draw upon crucial EU workers of all skill levels, who have so far served to mitigate this shortage, the slowdown of growth will continue.”

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Llandeilo gas works to begin say Wales & West Utilities

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WALES & West Utilities will shortly begin work to upgrade gas pipes in Llandeilo.

Wales & West Utilities has liaised with Carmarthenshire County Council to plan the work and it has been agreed that work will commence after the town has celebrated the Festival of Senses.

The £123,000 investment scheme, which is essential to keep the gas flowing safely to heat and power local homes and businesses, will begin in New Road on 21 November. This section of work will be complete before Christmas and Wales & West Utilities will return to the town next year to undertake further work in the Crescent Road area. Barring any engineering difficulties, work in the town will be complete by the end of February next year.

Wales & West Utilities Adam Smith is managing this gas pipe upgrade work. He said: “Working with the Council, we have planned this work to accommodate the needs of the town.

“While most of the gas network is underground and out of sight, it plays a central role in the daily lives of people across Llandeilo. Whether it’s heating your home, making the family dinner or having a hot bath, we understand how important it is for your gas supply to be safe and reliable and there when you need it.

“We know that working in areas like this is not ideal, but it really is essential to make sure we keep the gas flowing to homes and businesses in the area, and to make sure the gas network is fit for the future. We’ll have a team of gas engineers on site throughout the project to make sure our work is completed as safely and as quickly as possible while keeping disruption to a minimum.

“This work is essential to keep the gas flowing to local homes and businesses today, and to make sure the gas network is ready to transport hydrogen and biomethane, so we can all play our part in a green future.”

Our Customer Service Team is ready to take your call if you have any questions about our work. You can contact them on freephone 0800 912 2999.

Alternatively, you can contact us on Twitter @WWUtilities or Facebook.com/WWUtilities.

Wales & West Utilities, the gas emergency and pipeline service, brings energy to 7.5m people across the south west of England and Wales. If you smell gas, or suspect the presence of carbon monoxide, call us on 0800 111 999 straight away, and our engineers will be there to help any time of day or night. Before visiting, we’ll ask you to let us know if you or anyone in your household, is experiencing Coronavirus symptoms or self-isolating. We’ll still come and help you: but our teams will take some additional precautions to keep us all safe.

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New recycling facility opens for Carmarthenshire businesses

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A new commercial waste recycling centre located in Nantycaws has been launched today (Monday October 31) by Carmarthenshire County Council in partnership with CWM Environmental Ltd.

Located next to Nantycaws Household Waste Recycling Centre, the new facility will focus on providing an outlet for businesses in Carmarthenshire to recycle their waste responsibly, with the waste collected at the site recycled or re-used to create sustainable products whenever possible.

The paid for service accepts a range of materials including metal, cardboard, plastic, plasterboard, soil, hardcore, paint, glass, asbestos (double bagged), large white goods including fridges and mixed general waste.

Costs will be competitive to encourage as many businesses as possible to use the facility and will vary depending on the type and amount of waste presented.

A valid waste carrier’s certificate and waste transfer note will be required to use the site.

Cllr Edward Thomas, Cabinet Member for Transport, Waste and Infrastructure Services said: “We hope to significantly increase the amount of waste being recycled from businesses in Carmarthenshire thanks to the introduction of this new recycling centre in Nantycaws”.

“Our long-term ambition is to change the perception of recycling for businesses by supporting them to recycle as much as possible. We want to promote responsible waste practices in the county and minimise the levels of business waste being presented at our household waste recycling centres, which has risen in recent months.

The new commercial recycling centre will help to achieve Carmarthenshire’s ambition of delivering a circular economy throughout the county as well as becoming a leader in recycling and re-use within Wales.

For more information visit the recycling section of the Council’s website – Carmarthenshire.gov.wales/recycling

A circular economy focuses on eliminating waste by cutting down on throw away consumption and turning materials that would have previously been sent to landfill into a valuable resource.

This project has been funded through Welsh Government’s Circular Economy fund.

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National Botanic Garden of Wales welcomes new director

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Dr Lucy Sutherland is the new Director of the National Botanic Garden of Wales.

She has joined the Welsh institution from her role as a strategic consultant to the Royal Botanic Gardens and Domain Trust which manages the Royal Botanic Garden Sydney, Blue Mountains Botanic Garden and the Australian Botanic Garden Mount Annan.

She started in her new job on Monday October 24.

Dr Sutherland said: “It is an exciting and rare chance to lead a relatively young botanic garden through its next phase of maturity.

“It is also a unique opportunity at a time when the global population is facing multiple crises and there is growing ambition and support for addressing climate change and continuing efforts towards biodiversity conservation and a sustainable future.”

Dr Sutherland sees the National Botanic Garden of Wales as “continuing to have a critical role in this agenda.”

She is an Honorary Professor at the University of Adelaide and was previously the Director of the Botanic Gardens and State Herbarium in South Australia, Acting Director of the Australian National Botanic Gardens and the National Co-ordinator of the Australian Seed Bank Partnership.

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