Construction workloads fell in all sectors towards the end of 2009, says the latest RICS survey of the industry, amid signs that the impending general election is stalling new projects. 12% more chartered surveyors reported falling rather than rising workloads for the final quarter of 2009. This compares with a net balance of 6% reporting falls in Q3, and indicates that a recovery in the construction sector is further out of reach, with workloads in decline for the seventh consecutive quarter.
Public non-housing workloads declined for the first time since Q1 2009, indicating that there has been a slowdown in planned government capital spending projects. Many respondents cited the general election, as well as the continued lack of development finance, as the main cause of inactivity.
Private housing, private industrial and infrastructure all experienced further declines in workloads, with the net balance of chartered surveyors reporting falling rather than rising workloads declining to -17%, -19% and 11% respectively.
Overall expectations for workloads, employment and profits for the next twelve months are all fairly downbeat. Workloads are projected to be slightly higher with 2% more chartered surveyors expecting an increase, but this positive balance is modest and is lower than the third quarter reading of 9%. Meanwhile, the perception is that jobs will continue to be lost, with 5% more chartered surveyors believing this will be the case, and profit margins squeezed as competition for the limited amount of work on offer intensifies. Significantly, 29% more respondents to the survey still expect profits to drop further than begin to see an increase in margins.
Commenting Simon Rubinsohn, RICS chief economist said: "The acceleration of capital spending programs seems to have faltered in recent months and our members' perception is that this is due to more caution being exhibited by the government in the approach to the general election. Coupled with the fact that development finance is still in very limited supply, this sector is likely to remain locked in recession for at least the first half of this year."
Source: RICS
