RICS survey says workloads are slowing - a day after ONS declares industry is in recession
Further evidence of a slowdown in the construction sector has emerged with the RICS reporting that fewer surveyors said workloads had increased in the second quarter of this year compared to the first three months.
Critically, the survey was carried out in the days after the result of the June 23 referendum – when the UK voted to leave the EU – was known.
According to the RICS, 17% more respondents reported a rise in activity over the second quarter compared with 28% in the first quarter.
The biggest slowdowns were in the private commercial, industrial and housing sectors with housing down to 27% in the second quarter from 36% for the previous three months.
The survey said that the biggest hindrance on output was access to finance with more than two thirds of contributors highlighting this as the main challenge.
Simon Rubinsohn, RICS chief economist, said the results were “not altogether surprising given the build-up to the EU referendum” but added: “Significantly, the biggest issue at the present time alongside uncertainty looks to be credit constraints with over two thirds of contributors highlighting this issue as a concern.
“Anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the EU could see some investment plans in the construction sector scaled back.”
Yesterday, the ONS said construction has entered recession despite the overall UK economy unexpectedly growing.
The ONS’s first estimate for second-quarter growth put the UK’s overall growth at 0.6% but construction registered a 0.4% decline.
It was the second successive quarter of construction output decline, after a 0.3% fall in the first quarter, putting the sector in recession.
Earlier this week, the RIBA’s latest Future Trends survey for June – carried out before the referendum – said architects’ confidence about forthcoming workloads had dropped by a quarter.