Construction industry regaining lost Brexit ground

The construction industry is making up the ground lost following the EU referendum held last June, according to the latest Royal Institution of Chartered Surveyors (RICS) survey.

After hitting a dip around the time of the Brexit vote, growth expectations over the next 12 months have increased for the second consecutive RICS construction market survey.

This report covers the fourth quarter of 2016, with the final three months of the year recording a score of +57.

In terms of employment, expectations grew for the second consecutive month. 41% more respondents forecast an increase in the construction industry employment over the year to come.

These figures mean that both employment and workload expectancies have now recovered to their pre-referendum levels.

The last quarter of 2016 experienced modest growth, with 18% more respondents reporting an increase in total workloads. However, concerns remain with some chartered surveyors highlighting the impact Brexit uncertainty has had on inhibiting investment and activity.

Construction output rose in most sectors with the exception of public non-housing. As has been seen in other recent construction surveys, residential housing was the strongest performing sector.

27% more respondents reported a rise in private housing workloads (rather than a decrease).  A rise in workloads was also reported in the private commercial and infrastructure sectors.

Respondents to the survey expect to see the road and rail infrastructure sectors to show the most significant increases in construction output nationally.

The skills shortage continues to cause problems for the industry despite the concern receding over the last five reports. One aspect that remains a problem is the shortage of quantity surveyors with 66% of respondents highlighting a gap – the highest figure since 2008.

Output and input costs increased over the final three months of 2016 with input prices continuing a sequence of uninterrupted growth going back to the second quarter of 2010.

Jeremy Blackburn, RICS Head of Policy, said: “Many firms are currently having to bring construction professionals in from outside the UK.  The lack of quantity surveyors consistently apparent in our survey is also underscored by the fact that, at the moment, under the government’s Shortage Occupation List, it is easier to employ a ballet dancer than a quantity surveyor.

“Even if we were to reverse this and also ensure that through Brexit we maintain access to EU workforce, we would still have a domestic shortfall of skills. The Industrial Strategy is a golden opportunity to align education, training and employer work paths – along with modern methods of construction – to ensure we have the skilled workforce to meet our building targets.”

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