| 25 June 2024, Tuesday |

UK construction sees biggest increase in workload since 2016

Britain’s construction sector is reporting the biggest rise in its workload in 5 years, led by high demand for housing and the resumption of other projects as the COVID-19 pandemic eases, a quarterly survey revealed on Thursday.

The Royal Institution of Chartered Surveyors noted that members expected profit margins in the sector to rise for the first time since 2019 and for recruitment and volumes of work to increase in the next months.

RICS Chief Economist Simon Rubinsohn said “the indications are that the industry has adjusted relatively well to COVID-related work practices with most respondents to the survey suggesting only a small hit to productivity.”

The balance for workloads jumped to +26 in the 1st quarter of 2021 from +2 in the 4th quarter, its highest since early 2016. Private residential construction saw the biggest increase, followed by infrastructure. Social housing, public-sector works and commercial and industrial projects also increased.

The RICS survey took place between March 12 and April 11.

Britain’s property market has performed much more strongly than the wider economy throughout the past year’s pandemic, because of a tax cut on house purchases and a jump in demand for larger homes outside city centers which are more suited to home-working.

The biggest constraint on construction was now a shortage of building materials, instead of the financing difficulties faced in previous quarters, RICS said.

Productivity in the construction sector was down by nearly 5% because of social distancing requirements for workers, but this was a smaller impact than surveyors had expected when the new measures were introduced last year.

Official data for February still revealed that output was 4.3% lower than a year earlier. But other private-sector surveys have also pointed to fast growth more recently. IHS Markit’s Purchasing Managers’ Index for the construction sector showed the largest increase in output since 2014 in March.

  • Reuters