Results of the Q3 RICS UK Construction and Infrastructure Market Survey show 20% more chartered surveyors reported that their workloads had risen rather than fallen – up from +15% in Q2.
Private housing and infrastructure workloads reported the strongest rise while activity across the private industrial and public non-housing categories improved modestly with net balances of 9% and 11%, respectively.
A soft patch was highlighted in public housing where the pace of workloads slowed from +12% to +7%.
Regionally, workloads are now reported to be increasing across all areas with notable acceleration in the Midlands and East.
Financial constraints are reported by 75% of surveyors to be by far the most significant brake on growth with firms reporting difficulties in accessing bank finance and credit.
Surveyors reported growth in the number of new business enquiries received and 42% more respondents saw more new hires in their company over the last three months.
But the outlook for the economy as a whole has led to a reduced optimism for the construction sector over the year ahead as Brexit casts its shadow.
Jeffrey Matsu, RICS Senior Economist said: “While ongoing capacity constraints have supported steady workload activity, the outlook going forward is far from clear.
“Recent Brexit-related indecision has added considerably to this uncertainty, but whatever the outcome, the pace of growth is expected to decelerate if only due to cyclical market conditions.”
Hew Edgar, RICS Head of Policy added: “Despite challenging market conditions and Brexit looming, overall construction output in the UK is up on the second quarter of the year, and in particular it’s very positive to see that workloads for much needed new homes and infrastructure are increasing.
“We’ve long called on the government to secure funding to ensure Britain’s exit from the European Union doesn’t impact the delivery of vital infrastructure schemes, and encouragingly our latest survey revealed that rail, roads and energy are the subsectors expected to see the strongest growth in output over the coming twelve months, unsurprising given recent announcements in these sectors.
“However, the government must act promptly to put measures in place to keep the funding from European Investment Bank (EIB) or introduce a new lender, or lending mechanism, to plug the gap created from the potential loss of EIB funds, particularly for big ticket infrastructure projects such as HS2, Hinkley Point C and Heathrow’s expansion as these are of great importance to the UK.”