A senior economist at the RICS looks at the year ahead for the industry
Many commentators suggest the government should be using the construction sector to stimulate growth in the rest of the economy, either by increasing spending directly, or by implementing new mechanisms to attract investment.
RICS agrees and the logic is compelling: research shows that every £1 spent on construction output generates an additional £2.84 of total economic activity - one of the highest “bang for your buck” of all sectors in the UK economy.
The latest RICS construction survey highlights that workloads at the national level are relatively stable. Public sector workloads continue to decline in the face of government spending cuts, while most private sector workloads continue to rise.
The regional divergence that emerged at the end of 2010 has become more pronounced, with London and the South-east recording rising workloads in contrast to other parts of the country.
Over the next 12 months we predict positive workloads, but profit margins remain negative, reflecting the continuing pressure as input costs rise more rapidly than output prices.
Josh Miller is a senior economist at the RICS