UK construction sector activity firms in third quarter

UK construction workloads lifted slightly in the third quarter, though growth in London was depressed by Brexit uncertainty, according to a survey of the sector published on Thursday.

The Royal Institution of Chartered Surveyors (RICS) quarterly construction market survey found a balance of 19% of surveyors reported an increase in current construction workloads in the quarter, up from 17% in the preceding period.

Of all the subsectors, infrastructure was the most positive, with a balance of 17% reporting rising workloads.

Private housing saw the highest levels of growth compared to other construction sectors, with a balance of 27%.

The private commercial sector saw the workload balance dip marginally to 16% from 17%.

"What the figures mask, is the disparity between the kinds of properties that are being built," said Jeremy Blackburn, head of policy at the lobbying group.

"When the Communities Secretary publishes his Housing White Paper later this month, he must deliver a housing programme that benefits more than the just the fortunate few. We need to shift the rhetoric away from home ownership and encourage the building of affordable rental properties in the suburbs and our cities."

Eduardo Gorab at Capital Economics said it was worth bearing in mind that by being above zero, all of the main sectoral balances still point to rising construction activity.

"More encouragingly, the forward-looking aspects of the survey showed a more dramatic improvement. Indeed, rising to 49% from a three-year low of 23%, the future workloads balance rose above the survey average of 31%. Similarly, employment intentions and profit expectations also recovered much of Q2’s losses," he added.

"Yet, at 35% and 22% in Q3, these balances are still lower than in Q1 when they stood at 41% and 38%."

He added that skill shortages are likely to continue to constrain the sector and that tighter future immigration controls may well exacerbate this problem.