RICS survey finds government housing targets under more pressure as private-sector workloads fall
Workloads are falling at the most dramatic rate for over a decade, according to an RICS survey published today.
The UK Construction Market Survey blamed the declining number of residential new-build developments, which is taking its toll on the construction sector.
Construction workloads declined at their fastest rate since the third quarter of 1995, breaking more than 11 years of uninterrupted growth.
The private housing sector has suffered the most, with workloads declining at the fastest rate in the survey’s history.
According to the report, the credit crunch has forced housebuilders to severely limit output, which has put the government’s target of building 3 million new homes by 2020 even further out of reach.
With 240,000 new homes needed to be built each year to reach this target, and only 175,700 built in 2007, the achievement of the 2020 target is becoming highly unlikely, says the report.
The largest workload declines were felt across Wales, Scotland and Northern Ireland.
However, some sectors – including infrastructure and private industrial – are still reporting small levels of growth.
David Stubbs, RICS senior economist, said: “Up until now we have been seeing growth in the construction industry slowing down. However, these figures show that workloads are actually falling in almost every sector.
“This decline can be attributed to the lack of availability of debt finances and the fall in prices, which is taking its toll on developers.
“If this pattern continues then the industry will have to start making significant cut-backs. This downturn will also have a negative effect on housing targets, which will not be achieved at current levels of output.”
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