Construction activity rises in Q1 2012, claims survey

Published:  11 May, 2012

Activity levels in the construction sector edged upwards in the first three months of the year according to the latest RICS Construction Market Survey (10 May 2012). This result contrasts with the sharp fall in output suggested by the official data.

Eight percent more chartered surveyors across the UK reported increases rather than decreases in workloads. This is a notable improvement on the negative reading seen towards the end of 2011 and reflects a marked contrast in performance between the private and public sectors. The survey suggests the private sector is now showing some signs of life, with workloads in the commercial sector in particular picking-up. On the other hand, public sector construction activity remains depressed. 

Perhaps unsurprisingly, overall input costs – such as raw materials and labour – continued to increase in the three months to March as a net 29% more respondents reported rises in outlays. The most significant increases in costs were seen in materials, while staffing costs remained flat.  

Simon Rubinsohn, RICS' chief economist, said: "The start of the year saw a cautious level of optimism develop across the UK construction industry. Workloads rose across the sector, albeit modestly, and this looks as though it could continue over the next twelve months. Promisingly, this could also result in an increase in the numbers of jobs created in the sector. 

“There are of course still significant hurdles to overcome. Finance for development remains a problem as does macro economic uncertainty. On top of this, the public sector will continue to scale back its capital spending programme, putting ever more pressure on the private sector and institutional investors to deliver.”