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Outlook gloomy for construction, says RICS report

Construction continued to stall in the last three months of 2011 and the outlook for the next 12 months looks bleak, according to a report released today.

The RICS Construction Market Survey reported that 7% more respondents said workloads were falling – in quarter three this was just 1%. And over the next 12 months participants said they expected workloads and employment within construction to stagnate further.

Just 14% of participants said they felt the government would meet its Autumn Statement pledge to attract enough funding for planned infrastructure projects.

“Predictably, with workloads continuing to fall and costs slowly increasing towards the end of the year, the outlook for the construction industry remains rather downbeat with no prospect of improvement in sight,” said RICS chief economist Simon Rubinsohn.

“Particularly worrying are the questions being raised over the government’s plan to secure institutional funding for infrastructure projects. We would hope that this scepticism proves to be overly pessimistic, but the responses highlight the sizable job the government still has to do in convincing industry professionals that this approach is going to deliver.”

Private sector construction remained relatively flat towards the end of 2011 while public projects continued to fall. In levels of public housing construction 17% more surveyors reported a fall.

Only a quarter of participants thought the Get Britain Building Fund — the £500M government pot of money for private developers to restart stalled housing and commercial schemes — will impact positively on the sector.  

London and the South East were the only areas reporting positive growth. There was no sign that the pressures being felt by SMEs was decreasing and some respondents said government initiatives were actually unhelpful.

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