Surveyors report biggest fall in construction activity for more than three years

The RICS has released its most pessimistic quarterly sentiment survey since the start of the covid pandemic, with a steep rise in the number of surveyors reporting that workloads are in decline.

The latest UK Construction Monitor report shows that a net balance of -10% of surveyors reported a decrease in activity in the third quarter of the year.

This is a sharp fall on the -1% reported for the previous quarter and is the most downbeat result since the covid outbreak in March 2020.

RICS hq 2

The latest RICS survey is the gloomiest since the outbreak of the covid pandemic in March 2020

The largest fall is in private housebuilding, where the net balance of surveyors reporting a decrease in activity increased from -12% to -26%. Public housing also fell into negative territory to -7%.

Simon Rubinsohn, chief economist at RICS, said: “The tougher environment around the housing market is now coming through in terms of a slowing in the build out rate of new developments according to feedback from RICS members.

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“This suggests that housing supply is likely to fall at least for the next year compounding the problems already being faced by many of those looking to get a first step on the property ladder or move into the rental market.”

Elsewhere in the construction market, private industrial work fell from -6% to -11%, while private commercial also fell to -8% compared to a positive balance last quarter.

Infrastructure and public works also reported a slowdown, although both remain in positive balance territory, although they fell from +17% to +10% and +14% to +8% respectively.

A net balance of +38% of respondents said the credit environment is becoming more restrictive, although the number expecting credit conditions to worsen has dropped from +47% to +25%.

RICS UK Construction Monitor

The RICS UK Residential Market Survey is a monthly sentiment survey of chartered surveyors. A total of 1,355 surveyors responded to the latest survey.

Surveyors are asked 12 questions on a range of topics including workloads, new business enquiries and optimism about the future

The ‘net balance’ refers to the proportion of respondents reporting a rise in a metric minus those reporting a fall.

For example, if 30% reported an increase in workloads and 5% reported a fall, the net balance would be +25%.