Strong house building to drive construction recovery

House building across the UK continued its revival towards the end of 2013 with the private sector leading the way. However, the current increase in activity is being met with some shortages of both skills and materials, according to the latest RICS Construction Market Survey.

Despite the fact that the recovery in the construction industry is only just getting underway, skills shortages are already being identified as a constraint on activity. 36 percent of respondents claim that labour shortages are restricting building. Skills shortages are increasing across all of the trades but bricklayers remain particularly scarce due to strong demand from the housing sector. A higher percentage of respondents are now reporting problems sourcing relevant skills than at any time since mid-2006.

During the final three months of the year, almost 40 percent of respondents also claimed that a scarcity of materials is limiting activity with surveyors noting that bricks and concrete blocks, in particular, are in short supply.

Significantly, infrastructure construction – a core priority of the government’s economic plan – is showing signs of picking up speed with the pace of growth increasing at its fastest rate in almost seven years (net balance 24 percent).

The improving picture in the construction sector is also visible at a regional level with workloads rising for the second consecutive quarter in all parts of the country. Significantly, the stronger regional picture is evident in most segments of the construction industry.

Looking ahead, expectations for future construction activity were extremely upbeat with 74 percent more chartered surveyors expecting workloads to increase rather than decrease during 2014. Furthermore, predictions for employment levels and company profits were also very positive, suggesting that the construction sector may at long last be beginning to prosper.

Alan Muse, RICS Director of Built Environment, says that with the economy having turned a corner in recent months, it would seem that the construction industry has followed suit and activity is up right across the country: “More homes are being built, infrastructure is being upgraded and each part of the UK is benefiting from this more positive picture. However, with recent estimates stating that over 230,000 new homes need to be built just to keep up with population growth, further initiatives from the government will be necessary to get close to this target.”

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