Construction workloads drop
in the North West as confidence in the sector falls
DESPITE the Government promising to
deliver 200,000 new homes by 2020, the latest survey by the Royal Institution of
Chartered Surveyors (RICS) has revealed that growth in the North West's private
housing sector slowed down during the 1st quarter of 2016.
Only 45% of those working in the North West's private housing sector reported a
rise in growth, rather than a fall, over the 1st quarter of 2016, compared
with 50% in the last quarter of 2015.
Across all sectors, the RICS UK Construction Market Survey showed that only 34%
of the North West's construction professionals saw workloads rise, rather than
fall, compared with 43% the same time in 2015. The survey also revealed that
confidence in the outlook for the region's construction sector has dropped, with
only 38% of respondents expecting workloads to increase over the coming 12
months. This is a considerable decrease on expectations from this time last year
when 75% more of the North West's construction workers expected to see workloads
RICS Chief Economist, Simon Rubinsohn said:- "On the surface, it might
seem surprising that we are witnessing a slowdown in the construction sector
just a few months after hearing the Chancellor's 'We Are The Builders' speech,
given the Government's significant commitment to this sector. One might well ask
why growth in private housing workloads is softening at a time when policy is
firmly focussed on the creation of new starter homes. We have long held the view
that starter homes cannot be the only solution. There is an issue around the
availability of land on which new houses can be built, and we would like to see
more being done to free up private brownfield sites.
Our survey tells us that planning delays are one of the biggest barriers to
growth in the construction sector. We have recommended that Councils work
together to create a team of emergency planners who can parachute into boroughs
that are experiencing significant delays, therefore reducing a major growth
barrier. That said, we cannot discount the climate of uncertainty caused by the
forthcoming EU referendum. We know that a range of sectors have been affected by
these issues as investors look to delay any decisions until a final outcome has
been determined, and construction is no exception."
Meanwhile, following 4% employment growth in 2015, respondents
foresee headcounts continuing to rise in the North West over the coming 12
months with a net balance of 30% more of the region's construction
professionals expecting growth.
Charles Nixon FRICS of Thornber and Walker in Preston said:- "Contractors
are busy and being more selective in what they will tender for, although we're
not seeing any noticeable effect on tender prices."
Kevin Eccles FRICS, Countess of Chester Hospital NHS Foundation Trust adds:-
"Works and professional service prices continue to be very competitive,
sustaining pressure on contractors and consultants to work more efficiently.
Demands on capital budgets are leading to increased rigor in determining
priorities. Highly developed skills are needed to secure best value."