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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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Business

The Herald.Wales website launches this Friday, February 26

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A PEMBROKESHIRE based media company is launching a news website which will cover all of Wales this week, as it takes the leap from being a regional to a national news provider.

As part of the latest change to Wales’ evolving media landscape, ten jobs have been created and a further 20 secured, as Herald News UK Ltd launches its Herald.Wales service on Friday (Feb 26).

The company says it is investing a considerable sum over the next two years to provide news in both English and Welsh. As well as breaking news, coverage will include politics, entertainment, sport, and opinions from a number of contributors – including Welsh Media Awards (Best Columnist) Winner 2019, Matthew Paul.

Political Editor Jon Coles, said: “Launching a national news platform is something we’ve been thinking of for two years.

“The pandemic and lockdowns made us put the project on pause. Despite Covid-19, our print title, The Pembrokeshire Herald, has bucked the trend of shrinking circulation and that’s encouraged us to take this next step.”

Jon Coles continued: “We provisionally chalked in St David’s Day to launch; however, the late entrance of the US-owned and London-based Newsquest to the market with ‘The National’ came as a surprise.

“We had already set up and were trialling our website and tweaking it in the autumn.

“We were a founding patron of New Media Wales with whom we were looking forward to working with to provide independent news online.

“When New Media Wales partnered with Newsquest, I was surprised and disappointed. Our plans had to change and so we brought our launch date forward.”

When it comes to Herald.Wales’ stance on the big issues which affect Wales, Jon Coles said: “We will report every political view. Herald.Wales starts from the position that Wales should have the choice over whether to be an independent country.

“That doesn’t mean we’re an uncritical voice in support of independence. We’re realistic about the challenges it presents us as a nation. We will report each side of the debate so our readers can form their own opinions on Wales’ future. However, our sentiment will favour an independent Wales.”

South & West Wales Editor Tom Sinclair said: “We’ve built a network of contributors across Wales to provide news for every area.

“We will report on local news, news from Wales’ regions, and Welsh national news in Welsh and English. Video content will be important to us.

“Our introductory video has already gained plenty of views and our new Facebook page is getting more followers daily.

“We are confident there is space in the market for a genuinely independent online news source for Wales, to complement what is being offered by the bigger players such as the WalesOnline and BBC Wales websites.”

Advertising Sales Manager Brian Hancock, who has worked in news media advertising for twenty years, said that he thought that Herald.Wales would undoubtedly be a success.

He said: “Despite the slow down in revenues to all commercial news organisations due to the pandemic, we have secured commitments which will ensure the future of the new site.”

He added: “I would like to thank the nearly 5,000 Welsh businesses who have supported The Herald since we launched the eight years ago, and who are continuing to support our independent news with our weekly print publication, The Pembrokeshire Herald – and now Herald.Wales.”

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Business

Prendergast Butchers crowned Welsh Butcher’s Shop of the Year

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A HAVERFORDWEST butchers shop, has been named the 2020 Welsh Butcher’s Shop of the Year.

Prendergast Butchers established in 1950 by the Wolsey family, was awarded the title during the online Butcher’s Shop of the Year Awards 2020, held last week (Feb 15).

Described as a “really successful example of a traditional butchers’ shop”, it stood out to the judges for the owners’ passion for local produce and the recognition of how important this is to the success of the business. Prendergast was also praised for its clear pride in getting involved in initiatives that support the industry and local community.

Chris and Rachel Wolsey and their sons, Tom and Mark, have farmed in Pembrokeshire for almost 50 years producing high quality beef and lamb. Committed to providing locally and ethically sourced produce to the community, they ensure that all their products come directly from their own farm or from a few very carefully selected local suppliers who meet their quality ethos.

Chris Wolsey said, “This has been and continues to be a massive team effort from our family, our incredible staff. But we could not succeed without the incredible support of our customers and we are deeply grateful for their loyalty. As a family, we are proud to be flying the flag of the Great British butcher, we are passionate in providing the very best local produce for our customers and operating at the heart of our community.

“Our region like many others has faced economic challenges, the crisis of the high street and now Covid-19. But, we have shown that the traditional butcher’s shop can be a major force in helping local communities to get through these crises, and emerging stronger for all that.”

Kirstie Jones, Market Development Officer at Hybu Cig Cymru – Meat Promotion Wales (HCC) said: “We are delighted that a member of the HCC Butchers’ Club has won this award. They fought a tough battle to reach the top spot against The Gourmet Butcher in Llantrisant and Wavells Butcher, Llanrug who also deserve to be commended and congratulated for reaching the shortlist.

“Butchers have been vital in supporting our local communities since the start of the pandemic. They have kept their businesses running as well as providing additional services such as door-to-door deliveries, and have been rewarded with a surge in sales. HCC is delighted that a family-run butcher’s shop has been applauded for its dedication to serving the community with top quality Welsh produce.”

HCC was one of the main sponsors of the Butcher’s Shop of the Year Awards 2020.

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Business

Ferry services to be temporarily suspended from Fishguard

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FERRY services will cease for a period of up to 10 days in the coming weeks.

The MV Stena Europe, which usually runs between Fishguard Harbour and Rosslare Europort is being relocated to the Holyhead – Dublin route to cover for another ship undergoing repair. The company says that the decision not to provide alternative cover between Pembrokeshire and Ireland is due to a lack of ferry capacity as additional services are being laid on to meet the demand of transporting goods directly between the Irish Republic and continental Europe.

Irish hauliers are bypassing Welsh ports to avoid Brexit bureaucracy.

So-called “teething problems” with new export rules are causing “enormous strain on staff”, according to one haulage company.

But others warn of a longer-term shift by truck firms from using Holyhead, Fishguard and Pembroke Dock.

Stena Line has said it remains committed to its ports and ferry routes serving Wales despite a drop in traffic due to Brexit and Covid-19.
Since 1 January, drivers have had to provide specific paperwork to take goods between the EU and the UK.
The number of lorries using ferries between Holyhead and Dublin, and Fishguard and Rosslare, has dropped by 50% since the start of 2021.
Stena Line said it was a “blip” and it would work hard to protect the routes.

Secretary of State for Wales Simon Hart MP, said: “There is some evidence that things aren’t looking necessarily, permanently bleak.
“It’s one of those areas where we have to keep a very wary eye on it, but I think and hope that it is a temporary dip in the graph.”

Eluned Morgan says that the temporary suspension was concerning.

Eluned Morgan MS said: “Usually, Stena Line provides cover for the service between Fishguard and Rosslare when the normal ferry is not in service. This latest decision on the back of cancelled sailings last month is very concerning. We’ve seen as a result of the pandemic and the massive impact of Brexit slashing trade between Wales and Ireland that our ferry services have been left in a vulnerable position.”

“However, it isn’t helpful for MPs to suggest we should cut our losses and only have one ferry port in Pembrokeshire.

“Where is the ambition in that?

“Where is the opportunity we were promised Brexit would herald?

“Now is the time both Simon Hart and Stephen Crabb stepped up and fought Pembrokeshire’s corner.

“The alarm bells have been ringing for some time I’m afraid.

“They must make sure that the UK Government is fully aware of the uncertainty hanging over our ports which have been and I believe must continue to be important gateways to Europe and a vital part of our economic infrastructure.”

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