PATIENCE with Brexit indecision appears to be wearing thin as the construction sector shows signs of output growth accelerating and workload and employment expectations gathering pace, despite the uncertainty.
The results of the Q2 2019 RICS Construction and Infrastructure Market Survey shows that 12 per cent more respondents reported an increase in construction workloads across the region. Interestingly, workloads in public housing grew at the fastest pace, closely followed by infrastructure.
Following a strong Q1, workloads in the private housing sector dipped in Q2. However, there was improved growth in the region’s commercial and public non-housing activity. Looking to the year ahead, workloads are expected to be most resilient in the private housing and infrastructure sectors with 24 per cent and 30 per cent more surveyors, respectively, anticipating activity to rise rather than fall.
Despite an increase in hiring intentions, skill shortages continue to pose a significant challenge as well with half of respondents saying there is a shortage of quantity surveyors.
Despite the continued Brexit uncertainty, the RICS market confidence indicator – a composite measure of workload, employment and profit margin expectations over the coming twelve months – rebounded to 25 per cent (from 16 per cent in Q1).
RICS Senior Economist, Jeffrey Matsu, said: “Three years on and the long, unrelenting shadow of Brexit uncertainty is testing the mettle of the construction industry. After a prolonged period of delays and underinvestment, businesses now appear to be fed up and are proceeding cautiously with new hiring and intentions to invest.
“While much of this is likely to be backfilling or maintaining existing capacity, the requirements of larger projects such as Hinkley Point C and HS2 are constraining growth opportunities elsewhere. With the range of possible outcomes related to Brexit as wide as ever, we expect to see continued volatility in the construction output data but in the meanwhile foresee workload activity stabilising.”