Construction output fell by 3.9% between the first and second quarters of 2012, new figures show today.
The fall is 9.5% when compared with the same period a year ago.
The volume of all new work fell by 4.6% compared with the first quarter of 2012 - and by 12.8% compared with 2011.
A spokesman for the Office of National Statistics, which released the figures, said the poor weather and the extra bank holiday for the Queen’s Diamond Jubilee were likely to have been contributing factors, as well as moving the late May bank holiday to June.
Steve McGuckin, managing director of Turner & Townsend, said: “All the sunshine and Olympic feelgood factor in the world can’t hide the fact that these are black days for the construction sector.
“Stagnation has moved from the stuff of nightmares to the new norm.
“Despite Sir Mervyn King’s assertion this week that the economy is ‘slowly healing’, construction is still walking wounded. Output in the last quarter tumbled to levels not seen since the depths of the 2009 recession. The big drop in infrastructure output is of particular concern for the economy as a whole.”
Optimists who hoped 2013 would see an upturn in work were being forced into a drastic rethink, he added, and small and medium-sized firms were the worst hit.
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Britain's economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron's embattled coalition government.
Chancellor of the Exchequer George Osborne holds Disraeli's original budget box as he leaves 11 Downing Street for Parliament.
The Office for National Statistics said Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 after contracting by 0.3 percent at the end of 2011, confounding forecasts for 0.1 percent growth.
Most economists had expected Britain's $2.4 trillion economy to eke out modest growth in the early 2012, but these forecasts were upset by the biggest fall in construction output in three years coupled with anaemic service sector growth and a fall in industrial output.
Wednesday's figures will be a deep blow for Britain's Conservative / Liberal Democrat coalition, which has slid in opinion polls since a poorly received annual budget statement in March and risks embarrassment at local elections on May 3.
The government is also under pressure over revelations about its close relationship with media tycoon Rupert Murdoch.
The government desperately needs growth to achieve its overriding goal of eliminating Britain's large budget deficit over the next five years.
Britain's economy contracted by 7.1 percent during its 2008-2009 recession and recovery since has been slow, with headwinds from the euro zone debt crisis, government spending cuts, high inflation and a damaged banking sector.
Wednesday's data showed that output was still 4.3 percent below its peak in the first quarter of 2008, and the economy has only grown by 0.4 percent since the government came to power in the second quarter of 2010.
Output in Britain's service sector - which makes up more than three quarters of GDP - rose by just 0.1 percent in the first quarter after falling 0.1 percent in Q4 2011, kept down by a fall in output in the large business services and finance sector.
Industrial output was 0.4 percent lower, while construction - which accounts for less than 8 percent of GDP - contracted by 3.0 percent, the biggest fall since Q1 2009.
Britain's Office for Budget Responsibility forecasts growth of 0.8 percent this year.
Wednesday's data shows that first quarter output was no higher than a year earlier.
The Bank of England has warned that there is a risk of another contraction in the second quarter of 2012, due to an extra public holiday.
But unlike during the previous two quarters, it does not appear keen to provide further monetary stimulus through quantitative easing asset purchases, due to above-target inflation which looks stickier than before.
The BoE, and a number of private-sector economists, had argued before Wednesday that the underlying health of Britain's economy was stronger than ONS data suggested, due to relatively upbeat private-sector surveys and a fall in unemployment.
The ONS's preliminary estimates of GDP are the first released in the European Union, and are based partly on estimated data.
On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.
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India will allow foreign nationals to invest directly in the country’s listed companies, in a bid to deepen its under-developed capital markets.
“[We] decided to allow qualified foreign investors to directly invest in the Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility,” the finance ministry said in a statement. The move, which also allows pension funds and trusts greater freedom to invest directly, was announced over the holiday weekend and will come into into effect on January 15.
Foreigners were previously restricted to investing in India's equity market through mutual funds or other institutional channels.
But India is under pressure to attract overseas capital after a dismal year for its financial markets, with some economists warning of possible balance of payments difficulties in the months ahead .
Foreign institutional investors have turned bearish on India in recent months, scaling back investments as the country’s growth prospects dimmed and the global economic outlook worsened. The Sensex, India’s benchmark equity index, was one of the world’s worst performing markets in 2011, falling 25 per cent. Foreign investor returns were further hit by the rupee’s 16 per cent fall against the dollar last year.
Overseas funds withdrew a net $380m last year compared to record inflows of $29bn in 2010.
Last month the market capitalisation of all stocks listed on the Bombay Stock Exchange, Asia's fourth largest, fell below $1tn, a level the market first attained in May 2007.
“Such simplification in the procedure can help more inflows into Indian markets, definitely giving a boost to the stagnated current situation," said D.K. Aggarwal, an analyst at Delhi-based SMC Investments.
But other analysts are not convinced the initiative will result in an immediate rush of foreign capital to the flagging emerging market. “We are in an established downtrend. There’s no sign of change,” said Heman Kapadia, chief executive at Chart Pundit, a Mumbai-based investment advisory service.
India’s business leaders have urged the government to prioritise large infrastructure projects, as part of a larger effort to restore the country’s status as one of the world’s most promising investment destinations.
In his New Year address, Manmohan Singh, prime minister, told the nation it could not take India’s high economic growth rate for granted and warned of the need to pare back subsidies and implement tax reform.
“I am concerned about fiscal stability in future because our fiscal deficit has worsened in the past three years,” Mr Singh said.
“We have run out of fiscal space and must once again begin the process of fiscal consolidation.”
The Congress party-led government experienced embarrassing setbacks at the end of the year with failed efforts to introduce retail reform and pass anti-corruption legislation.
Source: FT - By James Lamont in New Delhi
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The George Osborne has delivered his to the , which includes the Government’s Growth Review Phase II and the National Infrastructure Plan.
The statement confirmed the plan to unlock up to £20 billion of private investment through signing a Memorandum of Understanding with two groups of UK pension funds, an additional £5 billion of infrastructure spending in this Spending Review period, and commitments to £5 billion of capital projects in the next Spending Review period. In addition, the Government is supporting around a further £1 billion of investment by Network Rail.
To make the UK’s infrastructure fit for the 21st century, the Government has published its National Infrastructure Plan 2011. The plan sets out a critical analysis of the state of the UK’s infrastructure and sets out a pipeline of over 500 infrastructure projects.
The key measures in the National Infrastructure Plan include:
- introducing a new approach to financing infrastructure, by leveraging £20 billion of private investment from pension funds;
- giving local authorities more flexibility to support major infrastructure by considering local borrowing to fund the Northern Line extension to Battersea, and exploring new sources of revenue, such as options for tolling on the A14.
- investing over £1 billion to tackle areas of congestion and improve the national road network, including £270 million for two new managed motorway schemes at congested times on the M3 and M6.
- investing more than £1.4 billion in railway infrastructure and commuter links, including £270 million for a rail link between Oxford and Bedford and £390 million on enhancement and renewal works to improve stations and infrastructure.
- investing £100 million to create up to ten ‘super-connected cities’ across the UK, with 80-100 megabits per second broadband and city-wide high-speed mobile coverage.
The Chief Secretary to the Treasury, Danny Alexander, will chair a new cabinet committee on infrastructure, to push through the delivery of the top 40 priority projects and programmes that are critical for growth.
The second phase of the Government’s Growth Review includes the following 'reforms':
- creating a £20 billion National Loan Guarantee Scheme, to lower the cost of loans to small businesses, and a £1 billion Business Finance Partnership, which will lend to mid-sized businesses and small and medium sized businesses in the UK through non-bank channels.
- increasing the Regional Growth Fund by £1 billion to provide ongoing support to grow the private sector in areas currently dependent on the public sector.
- an extra £600 million to fund 100 additional Free Schools, and an additional £600 million to deliver an additional 40,000 school places.
- introducing a new build mortgage indemnity scheme which will help up to 100,000 families to buy their own home, and launching a new £400 million Get Britain Building investment fund to progress stalled developments.
- providing £45 million of support to UK firms wishing to export, doubling from 25,000 to 50,000 the number of SMEs supported, and making similar support available to 500 mid-sized businesses.
- making 100 per cent capital allowances available in six Enterprise Zones (Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley).
- making available around £250 million from 2013 to support energy intensive industries manage the costs of electricity, including increasing the relief from the climate change levy on electricity for Climate Change Agreement participants to 90 per cent.
- an additional £200 million for science capital investment.
- investing £55m into the Strategic Rail Freight Network to help deliver schemes that remove bottlenecks and improve capability and longer term connectivity to the UK’s major ports.
- giving a bigger role to businesses in purchasing vocational training programmes. In the New Year employers will be invited to bid for a share of a new £250 million government fund. This will route public investment directly to employers.
- taking decisive action to remove barriers to hiring by making reforms to streamline employment law.
- investing £10 million over five years from 2013-14 in Project Enthuse, matched by investment from the Wellcome Trust, to improve the quality of science teaching in schools
- announcing how the Government will maximise the value of public sector data.
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DUBAI, UAE - The Northern Emirates property market has stayed relatively stagnant during the last quarter of 2010 with minimal price or rental movements. Continued supply, most notably in Sharjah will at some stage put downward pressure on rental prices, but connection to electricity, water and sewerage is a problem, slowing the pace of supply throughout the Northern Emirates, according to data from Asteco Property Management.
"During the past three months, the Northern Emirates have remained at a standstill, with rental rates for apartments, villas, and offices similar to the previous quarter. Although new supply is expected to drop rates further, delays in the actual handover of units is likely to prolong the process," said Elaine Jones, CEO, Asteco Property Management.
Across the Northern Emirates apartment, villa and office markets have remained relatively flat over the past three months. The ripple effect of affordability predominant in Q3 2010, which saw tenant migration to neighbouring emirates such as Dubai continued in Q4 but more slowly, consistent with the slowing rate of decline in Dubai.
The Asteco Northern Emirates Q4 2010 report reveals that three-bedroom apartments in Sharjah are priced in a range from $10,218 per year in Al Yarmouk to $12,670 in areas such as Al Khan and Al Nahdah. Umm Al Quwain, meanwhile, is still the most affordable emirate with average annual rates of $6,811.
The Sharjah villa market did not record any price changes from Q3 to Q4 with Al Quz, therefore, remaining the most expensive residential area for villas at $22,480 a year for three-bedroom properties. Elsewhere, Al Khan, and Shargan commanded $21,798 and $20,436 respectively for three-bedroom villas.
"A number of residents living in the Northern Emirates have moved around internally, seeking value for money and better located units; however, there has been no evidence of an increase in population to occupy the vacant units," says the report.
Source: Real Estate Channel
BANGALORE: India continues to lead the global outsourcing market with the overall share increasing from 51%in 2009 to 55% in 2010. As a proportion of national GDP, the sector revenues are estimated at 6.4% for the current fiscal.
The software industry apex body National Association of Software & Services Companies (Nasscom) forecasts the IT-BPO industry (excluding hardware) revenues to grow 19% to $76 billion. Som Mittal, president, Nasscom, said on Wednesday the pent-up demand for IT-BPO services, return of discretionary spending, new business models that encouraged first-time buyers and re-invented value proposition for existing ones were the key drivers for the industry performance.
The banking, financial services and insurance ( BFSI) vertical and US region accounted for the largest revenue growth. While the growth rate for emerging verticals and new geographies will also be robust at 1.3 to 1.5 times of core segments. Exports remain the mainstay of the industry contributing $59 billion at a growth rate of 18.7%. The IT services will grow the fastest at 22.7%. On the other hand, the domestic markets grew 16% to touch Rs 787 billion. Increased technology adoption across government, corporates and SMBs led to an increase in outsourcing within the domestic markets. The BPO export segment will grow by 14% to reach $14.1 billion. The BPO sector was impacted by delayed decision making and deal restructuring in the first half of the year, but picked momentum in the second half.
Nasscom said the engineering services landscape in India now reflects maturity and diversification to partner with global corporations. The engineering design and products development segment is expected to generate revenues of $11.3 billion growing 13.4% this fiscal. This is driven by the increasing use of electronics, technology convergence and need for localized products.
For the next fiscal, the software and services growth is expected to grow at 16%-18% with aggregate revenues of $68-70 billion. The domestic market is estimated to grow by 15% to 17% with revenues of Rs 90,000 crore.
As we step further, this decade heralds a new transformation for the industry. Transformative service delivery is always business focused, delivers confidence and manages risks, using modern business re-alignment; at the same time enabling sustained savings and value, said Mittal.
Source: Times of India
Collapsed architectural practice Archial has been sold to multi-disciplinary Canadian firm Ingenium.
The 400-strong Archial, which was led by chief executive Chris Littlemore and went into administration last week over unpaid taxes, will now become part of a new firm, Ingenium Archial Ltd.
Administrators from Price Waterhouse Coopers (PwC) would not comment on how much Ingenium had paid for Archial, its Asian arm Alsop Sparch and other “assets”, all of which have been trading as normal since going into administration, according to PwC.
The privately owned Ingenium Group employs 800 people working across disciplines including architecture, engineering, project management and interior design, with offices in Canada, the United States, Asia and the Middle East.
David Chubb, joint administrator and partner at PwC said: “We are delighted to be able to secure this sale and provide business continuity for customers, suppliers and employees alike in these uncertain times.
“Trading a professional services business in administration is extremely difficult and this success has only been possible as a result of the support of all these stakeholders. I would like to thank them for their assistance throughout this difficult period.”
Shares in Archial Group PLC were suspended from the Alternative Investment Market on September 17. Following the insolvency of its companies, there will not be any value realised for the holders of the suspended shares, PwC said.
MUMBAI: With the high networth individuals (HNWIs) population showing a robust growth of 33.2 per cent in the Asia-Pacific region last year, India and China are likely to remain the fastest-growing HNWI segment in the world, a report said today.
Emerging Asia (China, India, Indonesia and Thailand) is fast becoming the main engine of growth in the Asia-Pacific region and its HNWI segment showed a robust growth of 33.2 per cent in 2009, with wealth up 40.4 per cent, according to the 2010 Asia-Pacific Wealth Report released by Merrill Lynch Global Wealth Management and Capgemini, here.
India and China were the only two major Asia-Pacific countries in which industrial production actually rose in 2009, as they enjoyed a more diversified export market and broader domestic demand.
Hong Kong and India, which experienced the world's largest decline in HNWI population and wealth in 2008, experienced the strongest resurgence in 2009. The population of HNWIs grew 104.4 per cent in Hong Kong, almost reaching pre-crisis levels and 50.9 per cent in India, the report said.
HNWI wealth in Hong Kong and India jumped 108.9 per cent and 53.8 per cent, respectively, amid strong growth in both markets and macro-economic drivers of wealth.
"The strong economic resurgence in India has been boosted primarily by the country's stock market capitalisation which more than doubled in 2009 after dropping 64.1 per cent in 2008," Merrill Lynch Wealth Management, India, Chairman, Pradeep Dokania, told reporters here.
"The increased confidence by Indian HNWIs facilitated by the strength of the underlying economy which grew 6.8 per cent in 2009 has resulted in a surge in HNWI wealth in the region," Dokania said.
"China and India will lead the way in the Asia-Pacific region with economic expansion and HNWI growth is likely to keep out-pacing more developed economics," he said.
China's rapid GDP growth is expected to slow a little to 8.3 per cent in 2011. Going forward, China is expected to focus on balancing its economy by boosting the service sector and driving private consumption.
Source: Economic Times