UK construction sector upbeat for year ahead - RICS
The UK construction sector expects to grow throughout the current year, an industry survey showed on Thursday, despite ongoing skills and material shortages.
According to the latest RICS Construction and Infrastructure Monitor, a net balance of 33% of respondents said they had continued to see an increase in demand during the last three months of 2021. New infrastructure projects, specifically in the energy sector, were responsible for much of the increase in workloads.
A net balance of 84% cited concerns over availability of materials in the fourth quarter, while 77% said they had struggled to secure suitable labour. A total of 65% of respondents said they had difficulty finding bricklayers and carpenters in particular.
But despite that, firms remained optimistic for the next year, with expectations of upcoming workloads edging up to a net balance of 45%.
Infrastructure is expected to see the strongest demand, although both private residential and non-residential works are also expected to deliver strong growth output. Business enquiries in the fourth quarter held steady at 37%, the survey found, while 10% of respondents said they expected profit margins to improve during 2022. Only 2% in the third quarter said they expected margins to strengthen.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: "There is clearly an upbeat tone to the feedback received from across the construction industry. However, the concerns around labour and in particular skilled labour are just not going away.
"The long-term fix is to attract more younger people to the sector but that may be insufficient to address the immediate problem, which significantly is being reflected in expectations for a sharp uplift in wage costs over the next year."
Bradley Tully, senior public affairs officer at RICS, said: "The levelling up agenda offers important opportunities for the construction sector to play a vital role in transforming areas that are in need of regeneration."
On Wednesday, the government unveiled its long-promised Levelling Up White Paper, which is intended to start a decade-long programme refocusing on so-called forgotten communities, and includes increased investment in education, transport and broadband.
A total of 1,100 UK chartered surveyors were surveyed for the latest RICS survey.