Member Article

North East construction activity witnesses significant improvements

Construction activity in the North East improved significantly during the first three months of the year, according to RICS.

1% more chartered surveyors reported increases in workloads, which is a notable improvement on Q4 of 2011, when a net balance of -18% was recorded.

Construction professionals who were were questioned as part of the RICS Construction Market Survey also predicted that construction activity would continue to improve over the coming year, with 9% anticipating that workloads will rise in the next 12 months. This is the most positive reading since the end of 2009.

It is anticipated that this will result in modest improvements in employment expectations doe hre sector, although profit margins are likely to remain under pressure.

Most other parts of the UK witnessed a rise in workloads, with surveyors in London and the South East reporting the biggest increases in activity. The North recorded the first positive reading since the final quarter of 2007.

RICS Construction spokesperson, Michael Henning of Summers-Inman Construction and Property Consultants said: “The start of the year saw a cautious level of optimism develop across the construction industry.

“Workloads increased across many sectors in the region, albeit modestly, and this may continue over the next twelve months.

“However, the market is still extremely competitive and depressed margins are restricting opportunities for companies to expand.”

Unsurprisingly, input costs rose in the first quarter, with 31% of respondents reporting increased outlays.

Simon Rubinsohn, RICS Chief Economist added: “There are of course still significant hurdles to overcome and finance for development remains a problem as does macroeconomic uncertainty.

“On top of this, the public sector will continue to scale back its capital spending programme putting ever more pressure on the private sector and institutional investors to deliver.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .