Pain set to lead to pleasure - Surveyors signal better times ahead

Rises in both output and confidence are reported by the Royal Institution of Chartered Surveyors in its latest construction workload survey covering the second quarter of the year.

"It looks at last as if things are getting better for this industry - they certainly could not get much worse," commented RICS construction spokesman Neil Pountney.

He added: "There is a growing feeling in many regions that the worst could be over and that the construction sector is now slowly on its way back. But there is a long way to go before sustained growth can be expected. And this has led the RICS to forecast that another 40,000 jobs could be lost before the end of the year."

The survey of 200 surveying practices shows that activity increased by 1.7% in the period from April to June, although it was still down on last year's level.

For the first time in 18 months a majority of surveyors said they expected their workload to increase over the coming year. UK construction output is expected to grow by 2% next year and a further 3% in 1998. But the bad news is that there are still 18 months of pain to come, says Martin Laing, chairman of the Construction Industry Employers Council (CIEC).

CIEC's overview of the trade surveys by the Building Employers Confederation, Federation of Civil Engineering Contractors and Federation of Master Builders is of a 1% fall in total construction output for 1996 and the loss of 30,000 jobs.

Output increased in four out of seven sectors in the second quarter of 1996 and the overall level of enquiries was up for the first time in over a year. But CIEC's report warns of the danger of placing too much emphasis on one quarter's figure for output, employment or orders because of the risk of distortion by large contracts or the bunching of contracts.

However, CIEC does believe that the conditions necessary for a return to positive growth in the medium term are still in place. But Martin Laing said the situation was fragile and that "any improvement would appear to be tentative."

Laing said: "The industry needs to invest more in research and development and in training. But that can't happen unless we know the work is there. We need more stability in orders to achieve that and to achieve the 30% reduction in the cost of construction advocated by Sir Michael Latham."

Laing went on to say that market conditions in the contracting and civil engineering sectors remained harsh. The recovery in the housing market is seen as a gradual one.

Some 39% of firms are still reporting less success in tendering for new work. Laing believes that PFI and Lottery projects will have little impact on output until the end of 1997.