RICS Reports Slight Improvement in UK Construction

Workloads in the construction industry have been constantly falling in the 1st quarter of 2009, however the recent RICS construction market survey suggests that some key construction areas, such as housing, saw a slight improvement in the pace of decline. All in all, construction workloads remained negative for the 4th consecutive quarter with 45% of surveyors reporting a fall rather than a rise in overall workloads, which is up from 47% reported last time. The housing construction sector saw a slight improvement with 49% of surveyors reporting a fall rather a rise in the private housing construction compared to 66% reported last time; 13% of surveyors reported a fall rather than a rise in the public housing construction compared to 20% reported last time. RICS chief economist, Simon Rubinsohn, said that the slight improvement in the private and public housing sector might be explained by the slight pick-up on the property market as well as by new starts, reported by the UK Government in the first quarter of 2009. Private commercial and industrial workloads saw a drastic decline of 57% and 61% accordingly, the infrastructure sector saw the fastest decline in the history of RICS surveys with 34% of surveyors reporting a fall rather than a rise. The majority of the respondents in the infrastructure sector cited the lack of funding and the delay of public sector projects as a reason for the decline. The expectation for the future of construction workloads remain rather pessimistic with 38% of surveyors expecting a fall rather than a rise, compared to 45% of surveyors in the 4th quarter of 2008. The number of surveyors expecting the growth of unemployment remained virtually the same, at the level of 46%. 72% of surveyors expect the profits in the construction industry to decline in the coming months. Simon Rubinsohn concluded that despite the slight improvement in the housing sub-sector of construction, the sector as a whole is expected to face a double digit decline in the course of 2009, which will result in a loss of skills and professionals.