Q1 2016 RICS Construction Market Survey
The Q1 2016 RICS Construction Market Survey presents a picture of moderating growth with capacity constraints weighing heavily on the sector. Despite this, the outlook for the coming 12 months remains positive.
In line with recent trends, the private housing and commercial sectors continue to drive growth in workloads, with 36% and 37% of respondents reporting growth in these sectors. More moderate levels of growth are being seen in public housing and public non-housing (7% and 12% respectively). Infrastructure workloads continue their upward trend, with 20% of respondents reporting a rise in activity, and this is expected to continue to be a driver of growth over the coming 12 months.
The key impediments to growth are reported to be financial constraints, labour shortages and planning delays (64%, 59% and 58% of respondents are experiencing difficulties with each, respectively). However, it should be noted that the proportion of respondents reporting skills shortages has declined, from 67% in Q3 2015 to 59% in Q1 2016. In particular, quantity surveyors and bricklayers remain in short supply (61% and 58% of contributors cite issues with these trades).
50% of respondents have reported a rise in labour costs, this has been the main driver of aggregate input costs.
Optimism in the industry remains, with 55% of respondents expecting workloads to continue to rise. This is the lowest figure for a number of years; however, this is not surprising given that firms have indicated that they are working at 89% of full capacity.
The respondents of the survey also reported uncertainty over the upcoming EU referendum, with some suggesting that this is delaying project starts.
All areas of the UK are seeing increased activity levels, with the Midlands and North England regions of particular note. This is especially the case for the private housing and commercial sectors. Northern Ireland continues to lag behind; only 13% of respondents in the region have reported a rise in construction workload.