Apr 20th 2018 9:04am
Construction workloads remained resilient despite bad weather in the first quarter of this year, according to a survey published today.
The results of the Construction and Infrastructure Market Survey for the UK found that in the first three months of 2018, 11 per cent more chartered surveyors reported that workloads had risen, not fallen.
While 67 per cent of respondents across the UK noted bad weather conditions as a limiting factor, the “Beast from the East” was not enough to slow the pace of growth.
RICS said its quarterly series suggests the construction sector has largely enjoyed a period of steady growth since the early part of 2018 as the industry has geared up to meet the demands of a stronger economy.
British workloads increased across infrastructure, private housing and public non-housing in the early part of the year, with both new work and repair and maintenance activity rising steadily.
Private housing across the UK saw the strongest rise in workloads with 25 per cent more respondents citing an increase than a drop. This contrasts with the public sector where the pace of workloads dipped slightly with a net balance of -8% in housing, compared with 27 per cent in the last quarter of 2017.
In infrastructure, 8 per cent more contributors reported a rise rather than a fall in activity, and on a UK level, respondents expect the rail and energy categories to post the most significant increases over the coming 12 months.
Higher input costs and a shortage of labour continue to restrict growth in profit margins.
Although cost pressures may ease later this year, expectations for the expansion margins are still well below the three-year average of 40 per cent recorded between 2014 and 2016. Indeed, tender prices are expected to rise over the next 12 months with respondents in both the building and civil engineering sectors envisaging greater price pressures.
Besides the one-off factors related to inclement weather, labour shortages remain the key impediments to growth.
The lack of sufficiently skilled workers, particularly with regards to professional services such as quantity surveying is particularly challenging - around 80 per cent of contributors highlighted this as an impediment to growth. Indeed, the share of respondents reporting insufficient availability of quantity surveyors across the UK was the highest in ten years.
In an extra question added this quarter, 85 per cent of respondents were of the view that small and medium-sized firms are the most impacted by constraints on financing.
Despite the constraints that firms have been facing recently, surveyors remain relatively upbeat. Net balances of 44 per cent and 25 per cent of respondents expect workloads and employment levels, respectively, to continue to rise over the coming 12 months.
Jeffrey Matsu, RICS senior economist, said: “While a short-lived snowstorm may have snarled logistical supply chains and site works at the end of February, it was not enough to negatively impact on workload order books.