Construction outlook worst for a decade

Growth in construction workloads has fallen to the lowest level for more than a decade, according to the latest survey by RICS (Royal Institution of Chartered Surveyors).

A slowing housing market has seen workloads fall to their worst level since 1996, as the construction industry is hit by the effects of the credit crunch and demand for housing drops away. 

Only one per cent more Chartered Surveyors reported a rise than a fall in workload for the first quarter of 2008, down from 16% in the fourth quarter of 2007.

The worst hit sector was private housing with workload growth in this sector turning negative for the first time since 1999. The fall is due mainly to a downturn in the North, but private housing weakened in all regions and is now static in London and the South East, Wales, the Midlands and Northern Ireland.

Expectations for profit margins fell for only the second time in the survey’s history, and confidence that workloads will increase fell for the fifth consecutive quarter.

However, skill shortages have equalled the record low set in 2006 as the industry continues to employ labour from EU accession countries. The UK’s open and flexible labour market continues to provide a firm base for the industry.