Private housing hit as building workloads drop

Growth in construction workloads has fallen to the lowest level for more than a decade, as housebuilders and businesses are hit by the effects of the credit crunch and a fall in demand for housing.

The latest RICS UK Construction Market Survey reports that workloads are at the worst level since 1996, with only 1% more chartered surveyors reporting a rise than a fall, down from 16% in the fourth quarter of 2007.

The worst-hit sector was private housing, with workload growth in this sector turning negative for the first time since 1999. 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 per cent more chartered surveyors reported a fall in private sector housing workloads, down from the positive figure of 16% last quarter.

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

Equally, confidence that workloads will increase has fallen for the fifth consecutive quarter, falling below the survey’s long-run average.

RICS senior economist David Stubbs said: “Growth in the construction industry has slowed abruptly in the first quarter of this year. Private residential workloads are now shrinking as homebuilders react to challenging conditions in the housing market by reducing the number of new homes under construction.”