Member Article

Construction outlook worst for a decade

A slowing housing market has hit the UK construction industry, making it even more unlikely that the Government will reach its housing targets, according to figures published today.

The results of the Royal Institution of Chartered Surveyors (RICS) UK Construction Market Survey show that growth in construction workloads fell to the lowest level for more than a decade as house builders and businesses were hit by the effects of the credit crunch and demand for housing fell away.

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 areas such as London and the South East.

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.

Michael Henning, chairman of the RICS North East region, and a chartered surveyor with Summers-Inman in Newcastle, said: “Looking around the region, you will still see a great deal of regeneration work being carried out. We have quite a strong pipeline in terms of city centre redevelopments and the health and education sectors. However, it’s three months, six months and a year down the line that people in the industry are concerned about.

Clearly with the continuing credit crunch, project finance will be an issue but property professionals in the North East while not optimistic are not pessimistic either. There is a strong commitment to regeneration in the region and companies are realistic, they will work through the downturn on the basis the market will in time stabilise and begin to rise again.“

This was posted in Bdaily's Members' News section by Ruth Mitchell .