Construction turns positive but concerns persist
RICS says that sentiment turned positive in the UK construction market during Q1 2010 – for the first time in two years.
The UK construction market survey for the first quarter showed 5% more chartered surveyors reporting rising rather than falling workloads, compared with a net balance of 12% reporting falls in Q4 2009.
“This positive turnaround reverses a decline which has stretched for seven consecutive quarters, and is the first time that the net balance has turned positive since the first quarter of 2008, when it was 1%,” RICS says.
However, there are considerable variations behind this headline figure, with some surveyors reporting concerns about a lack of finance for development. There are also significant differences from region to region – for example there was a strong positive swing in London and the South East from minus 15 to plus 21. In the Midlands and East Anglia the net balance jumped from minus 9 to plus 10 but in the North and Scotland, the net balances remained in negative territory at minus 7 and minus 6 respectively.
In Northern Ireland, surveyors reported continued sharp falls in workloads, with the net balance deteriorating from minus 37 to minus 59.
Looking ahead, surveyors expect stable workloads overall but are more negative about the prospects for employment and profits.
Simon Rubinsohn, RICS chief economist, commented: “The construction sector seems to be finally lifting its head above the recession parapet but the continuing lack of development finance remains a major obstacle to a sustainable recovery with surveyors still pessimistic about future prospects. Concerns over likely cuts in public-sector capital spending programmes is another factor contributing towards the cautious stance of respondents to the survey.”
