General News
Construction Market Survey The slowing housing market has dampened confidence in the profit outlook of the construction industry in Wales and across the UK, making it even more unlikely that the Government will reach its UK housing targets, says the latest construction market survey from the Royal Institution of Chartered Surveyors (RICS). However, while the general trend across the UK is for a decrease in construction workloads, in Wales workloads continued to grow, with rapid growth in private commercial workloads and public housing, but a stabilising of growth in the private industrial sector. While chartered surveyors in Wales remain positive about future workloads, they are less optimistic about future profits, reflecting the trend seen across the UK. With an increase in the current skills shortage facing the construction industry, surveyors are also concerned about the future of employment in the industry. Cathy McLean, director of RICS Wales said: “The slowing housing and commercial property markets following the credit crunch and Northern Rock turmoil have clearly started to hit the construction sector, although to a much lesser extent in Wales than across the rest of the UK. The current financial instability is rocking market sentiment, and may see the industry enter a period of uncertainty. The skills shortage in Wales increased, and is becoming a concern, and doubts are likely to intensify over the Government’s ability to meet its		ambitious house building targets. Indeed, new housing starts have already begun to stagnate over recent quarters.” Across the UK, growth in construction workloads eased back in the fourth quarter as house builders and businesses were hit by the effects of the credit crunch and demand for housing fell away. Overall 16% more chartered surveyors reported a rise than a fall in the fourth quarter, down from 17% in quarter three. Meanwhile, new enquiries for housing grew at the slowest pace since 2006. The outlook for profit remains gloomy with surveyors continuing to expect below average profit margins. Equally, confidence that workloads will increase has fallen for the fourth consecutive quarter, although it remains above the survey’s long run average. However, skill shortages remain low as the industry continues to employ labour from EU accession countries with the UK’s open and flexible labour market providing a firm base for the industry in a period of economic stability. Sentiment across the country varied. The construction industry in Scotland outperformed other regions with workloads experiencing eight quarters of rapid growth.