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Brexit uncertainty stifles construction workloads

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Construction workloads have been stunted as Brexit uncertainty continues to spook investors, a new survey has revealed.

Activity in the construction industry has slowed across all sectors in the three months to June, according to the latest Royal Institution of Chartered Surveyors’ (RICS) market survey. 

Only a fifth (21 per cent) of respondents predicted an increase in total workload, down from 27 per cent in the previous quarter. 

According to the AJ’s sister title Construction News, the private commercial and industrial sectors saw the most significant decline.

Around 21 per cent of the 267 respondents saw their private commercial workloads rise in the second quarter, down 10 percentage points from Q1 (31 per cent).

RICS said: ’Anecdotal evidence from respondents suggests that uncertainty regarding Brexit is weighing on investment decisions, alongside the political turmoil generated from last month’s general election.’

Around 15 per cent of respondents reported an increase in workload in private industrial activity, down 22 per cent from the previous quarter.

RICS senior economist Jeffrey Matsu said ongoing economical and political uncertainties ‘appear to be weighing on sentiment’.

However, he added: ’All things considered, current conditions and year-ahead workload expectations are holding up rather well relative to the longer-term trend.

‘Given the ongoing nature of Brexit negotiations, it remains to be seen what impact this will have on financial conditions or the availability of skilled labour to the industry.’

Infrastructure activity has remained ’broadly unchanged’, according to the report. RICS said this could be due to ’support from the fiscal commitments outlined in the Autumn Statement last year’.

Glenigan has forecast a 4 per cent fall in the value of private housing starts next year

Respondents had a ’less optimistic outlook’ for the year ahead, with just 44 per cent expecting overall workloads to rise, down 9 percentage points from the previous quarter (53 per cent). 

Meanwhile industry tracker Glenigan has forecast a 1 per cent dip in the value of private housing starts this year and a further 4 per cent fall next year.

Glenigan said that ’the squeeze on household budgets was likely to mean a dip in new starts in private housing, retail and office work over the next 18 months’.

However its latest mid-year forecast for 2017 suggests the total value of underlying new project starts was set to rise by 1 per cent in 2017 and a further 2 per cent in 2018.

Glenigan points to a ’series of bright spots’ particulalry in civil engineering, logistics-led industrial work and hotels which will ’ help to keep the industry busy’.

A spokesperson said: ’Political uncertainty and doubts over the Brexit negotiations will inevitably take their toll on the industry’s prospects for the coming two years.

’But while slower economic growth is likely to impact on new projects starts, particularly in the private sector, the good news is that overall activity across the industry is set to continue expanding.’


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