Confidence still shaky

Construction activity rose sharply in the last three months of 1994, according to a report from the Royal Institution of Chartered Surveyors out today (19 January). But the surveyors fear that the growth will not be sustained into 1995.

The report includes a survey of the workload levels and expectations of 200 quantity surveying practices and is seen as one of the leading indicators of the state of the industry.

It found that during the three months to the end of December 1994 workload leapt by 7% compared with the previous three months, giving a 10% rise for the year. In the same three months in 1993 the workload dropped by 3%.

Despite this rise, confidence about the pace of recovery is already wavering with only 58% of firms anticipating an increase in workload over the coming year - a 13% drop on the previous quarter.

RICS construction spokesperson, Richard Houghton, said that although this burst of activity was encouraging, long term prospects were not necessarily so good.

'The market remains highly competitive and even with order books filling up there are few signs of any improvement in profit margins this year,' he said.

The private commercial and public works sectors have shown the best increase in work, 8% and 5% respectively. 'Some of the big developers, last seen during the 80's boom, are reappearing,' said Houghton.

But activity in the industrial sector remains quiet at 1% growth while housing association work and residential property are still suffering. A surplus of unsold homes is damaging the housing market despite a mid-summer burst in activity.

The survey also showed that the surge in workload was most acute in Scotland, with the Midlands, East Anglia, Wales and the South west, the South East and Northern Ireland, slowly improving. But in the North, workload remains flat.