According to the Royal Institution of Chartered Surveyors’ (RICS) latest UK Construction Market Survey, momentum continued to grow in 3Q14, with the headline workloads balance reaching a series high of 46% – its highest level since 1994. The RICS survey measures sentiment among members working in the sector using net balances (the proportion of participants giving a positive response minus the percent of those giving a negative one).
Workloads grew robustly across all sectors during the third quarter, with the private housing and commercial workloads net balances reaching new series highs. The private housing sector grew across the whole of the UK, with London and the South East seeing the strongest growth. In the private commercial sector, workloads reached a series high, with a net balance of 59% more surveyors reporting an increase in activity. Meanwhile, infrastructure workloads saw more balanced growth, with 27% more surveyors reporting a rise in activity. In Northern Ireland, infrastructure and private industrial sector growth remained flat (0%) for the fourth consecutive quarter.
Limited growth: labour shortages and supply chain struggles
Across the whole of the UK, labour shortages have become an increasing concern as momentum in the sector has picked up. In 3Q14, 59% of respondents reported this factor as a limitation on further growth in activity. Demand for bricklayers increased strongly compared to the previous quarter, with 71% of respondents in 3Q14 saying that this is an issue (compared to 59% in 2Q14). Materials shortages have also become more of a constraint in recent quarters, with 58% of respondents reporting concerns as supply chains struggle to cope with the acceleration in activity levels and delivery times lengthen. Furthermore, access to finance, as well as planning and regulation factors, remain to be a burden.
Despite these concerns, the strength and breadth of the growth that is being reported is a promising sign and is feeding expectations for further growth over the coming year. According to the survey, surveyors now expect workloads and employment to rise, on average, by 3.5% and 3%. Meanwhile, 47% more surveyors expect to see profits increase rather than decrease, and 58% more respondents expect to take on more employees in response to the rising workloads.
Access the UK Construction Market Survey for 3Q14 here.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/europe-cis/23102014/rics-releases-uk-construction-market-survey-for-3q14-724/