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House price rises and construction confidence 'must be matched by Government investment'
THE Government must live up to its promises and help instil confidence back to the North-East, an industry leader has warned.
Douglas Kell, director of the Civil Engineering Contractors Association in the North-East, says the area will continue to stagnate until ministers release vital cash to fund new projects.
Mr Kell last night demanded swift action to lift the region's confidence, which he says it still suffering from a lack of optimism and a dearth of work that could be addressed by Government intervention.
His warning came despite an Office for National Statistics (ONS) report saying North-East house prices had risen higher than Wales, Scotland and Northern Ireland in the 12 months to August, with the region's market close to the growth experienced in the South-East and South-West.
The ONS says UK house prices are at their record highest level for five years, with such confidence helping Newcastle-based homebuilder Bellway yesterday lift annual pre-tax profits to £140.9m from £105.3m and increase revenues to £1.1bn.
A survey from accountants KPMG also revealed UK construction firms expect to grow by up to 25 per cent this year.
However, Mr Kell, who last year said the North-East needed its fair share of investment for infrastructure to survive, said it was too premature to herald a marked resurgence in the region.
He said: “We would like to see the optimistic forecasts come about, and there are positive signs in the market place of things happening.
“But whether it will all come about in the North-East is still open to question.
“There are regions that are buoyant now.
“However, here a lot still depends here on whether Government investment, which was promised earlier for various projects materialises sooner rather than later.
“The North-East's unhappy position has at least bottomed out, and while there have been a few more enquiries, they are not enough for the industry here to be as optimistic as some other regions are.”
But Mr Kell's claims were rejected by Richard Threlfall, KPMG's UK head of infrastructure, building and construction, who said the construction industry was already benefiting from a real upturn in fortune and needed skilled workers to meet rising demand.
He said: “There has been a growing sense in the last couple of months that the worst is over and the results of our survey provide further evidence that construction activity is finally picking up.
“Construction companies now need to invest in growth. “What is holding back the industry now is not lack of demand, but the ability of businesses to recruit sufficient experienced staff.
“The next round in this highly competitive market will be won by those who have the resources to compete.
“Companies need to act now, because the industry’s resurgence is already underway.”
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