RICS blames Brexit uncertainty for slowing growth
Latest quarterly workload report form chartered surveyors indicates that construction workloads in the UK continue to rise, albeit at a slower rate than previously seen in the past three years.
The Royal Institution of Chartered Surveyors (RICS) quarterly survey of members finds that 19% more chartered surveyors reported that construction workloads in the UK had risen, rather than fallen this quarter. While this suggests growth, it is the lowest reading since Q2 2013.
'Brexit uncertainty' was blamed.
The Midlands remains the engine of growth in UK construction, RICS says, with 30% more respondents reporting a rise in activity. London and the southeast have seen growth levels ‘moderate significantly’, mainly due to the private commercial sector slowing.
Private housing saw the highest levels of growth compared to other construction sectors, with 27% more chartered surveyors reporting workloads had risen rather than fallen. In the private commercial sector, growth was unchanged from Q2.
In the infrastructure sector, 17% more contributors reported a rise rather than a fall in workloads and respondents expect the road and rail subsectors to be the drivers of growth over the coming 12 months. Meanwhile, activity in the public sector continues to underperform all others.
Looking further ahead, while respondents highlighted generally subdued growth over Q3 they are more optimistic about the year to come with 49% more respondents forecasting a rise in workloads rather than a fall. On average, contributors expect activity to rise by 2.5% over the next twelve months.
Expectations for employment growth have also improved with 35% more respondents forecasting a rise rather than a fall, up from 18% in Q2.
However, both workload and employment expectations are still lower than pre-Q2 levels and anecdotal evidence from respondents suggests that uncertainty relating of the UK’s future relationship with Europe is still causing them concern regarding their future workloads.
RICS UK head of policy Jeremy Blackburn said: “It seems that when it comes to private housing, we are indeed the builders. The government’s commitment to this critical sector has clearly had a positive impact on growth. However, what the figures mask, is the disparity between the kinds of properties that are being built. When the communities secretary publishes his housing white paper later this month, he must deliver a housing programme that benefits more than the just the fortunate few. We need to shift the rhetoric away from home ownership and encourage the building of affordable rental properties in the suburbs and our cities.”
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This article was published on 20 Oct 2016 (last updated on 20 Oct 2016).