Credit crunch hits construction sector as growth in workloads fall to lowest levels for ten years

Growth in construction workloads fell to its lowest level for more than a decade in the first quarter as the impact of the credit crunch hit the industry.

The latest figures from the RICS show that 20% of surveyors reported a drop in workload in the first three months of the year.

Private housing was the worst hit sector, with workload growth turning negative for the first time in nine years.

The fall is due mainly to a downturn in the North, but  private housing weakened in all regions and is now static in London and the South East, Wales, the Midlands and Northern Ireland. Nine percent more surveyors reported a fall than a rise in private sector housing workloads.

Expectations for profit margins among surveyors fell for only the second time in the survey’s history with sentiment falling sharply as growth in the private commercial and private housing sectors slowed.

However, skill shortages have equalled the record low set in 2006 as the industry continues to employ labour from EU accession countries.