It was a weak end to 2023 and a subdued start to 2024 for firms operating throughout the construction supply chain, according to the CPA Q4 2023 Trade Survey.

Trade surveys for the fourth quarter of 2023 indicated that it was the worst quarterly performance since the first half of 2020, when activity was disrupted by lockdowns at the height of the pandemic, with declines in workloads for chartered surveyors and SME building contractors, and falls in sales for both heavy and light side product manufacturers.

There are still some areas of growth, however, and workloads growth reported by civil engineering contractors confirms that infrastructure continued to provide activity, a pocket of growth also identified by chartered surveyors, alongside public non-housing. Outside of these sectors, however, the constituent surveys point to little near-term pickup in the first half of 2024.

Falls in new enquiries were reported across SME contractors’ main sectors of focus of house building, commercial/industrial and RM&I, which mirrors the official ONS data on construction output, which has shown a notable decline since the second half of last year, and new orders, which have declined since the end of 2022. For product manufacturers, sales are expected to fall in 2024, whilst for chartered surveyors expectations of growing workloads were again restricted to infrastructure and public non-housing.

A stark downshift in the housing market, reluctance among homeowners to commit to large improvements spending and lower volumes of large commercial and industrial projects in the pipeline mean that demand is increasingly being flagged as a primary constraint or concern for activity over the coming 12 months, particularly when this combines with flatlining economic growth, a step-change to higher interest rates and financing costs, and continued uncertainty over input inflation as the Red Sea transport diversions continue.