Brexit is delaying investment in the construction market according to the latest Construction and Infrastructure Market Survey from the Royal Institution of Chartered Surveyors (RICS).
RICS says that 'anecdotal evidence' from the companies taking part in the survey suggests that uncertainty regarding Brexit is weighing on investment decisions, alongside the political turmoil generated by last month’s general election.
However, a net balance of 29 per cent of companies continue to report a rise in private housing activity. Although growth in total workloads has slowed in the sector, it is still rising, with 21 per cent more respondents reporting an increase (down from +27 per cent recorded in the previous quarter). Expectations for the next 12 months also remain relatively positive.
Infrastructure workloads remain broadly unchanged, with roads, rail and energy expected to see the strongest growth in output over the coming 12 months. Two areas of the UK that are seeing activity continue to rise are the Midlands and East Anglia, where activity has been boosted thanks to a surge in infrastructure. Respondents in all other parts of the UK report a fall in workloads.
Financial constraints are reported to be by far the most significant impediment to building activity, and with a net balance of 79 per cent (from 70 per cent in Q1) is the highest reading in four years. Economic uncertainty driven largely by Brexit and the subsequent election result was identified as the primary cause of the constraint.
Despite the slowdown in growth, skills shortages persist with 55 per cent of contributors reporting them as a constraint on growth. After having eased in 2016, the intensification of labour shortages appears to be biting once more. The lack of quantity surveyors and bricklayers appears to be particularly acute, but the shortfall extends to other construction professionals as well.