The RICS UK Construction Market Survey for the second quarter of 2015 has reported that construction workloads rose in Q2 2015 with 44% more respondents reporting higher activity levels (up from 37% on the previous quarter), driven by office development and private house building.
The latest data shows workloads rose across all sectors and in each part of the UK. The pace of growth in Northern Ireland was slowest and at a headline level, 74% more respondents expect to see their workloads rise and respondents forecast growth of 3.8%.
51% of respondents reported higher workloads in private housing and 58% in the private commercial sector, following a 22% rise in new orders in the first quarter of the year.
Activity in London and the South East appears stronger than elsewhere in the UK, so profit margins and employment expectations are higher in these parts of the UK than anywhere else (62% more respondents expect to take on more people over the next 12 months and 58% expect higher profits).
Financial constraints and issues with planning and regulation remain the key restraints on growth in the sector with 58% more surveyors reporting difficulties in Q2. In addition, 40% of respondents reported shortages of materials, but this is an improvement on the 60% who were having such difficulties through most of 2014.
Alan Muse, RICS’ director of the built environment, said: “The upturn in workloads has led to a less competitive tendering environment, particularly across public sector projects, but a lack of accessible finance is now affecting a net balance of 58% of our members and while concern over labour shortages dipped slightly, the demand for cost and project management skills rose.
“Also typical as workloads recover is the emergence of other impediments to growth – outside of labour and finance constraints – such as planning and regulatory barriers, which could be exacerbated if cuts are made to local authority planning departments as backlogs in planning applications will have a knock-on effect to work pipelines.”
