A new survey has revealed construction workloads and the rate of employment in the sector slowed in the wake of the EU referendum…
A new survey from the Royal Institution for Chartered Surveyors (RICS) has shown a slowdown in construction after the vote to leave the EU.
According to the industry body, which represents chartered surveyors, uncertainty led to delayed investment.
The private commercial and industrial sectors saw a significant slowdown. Furthermore workload and employment rates were expected to grow but were slower than anticipated.
The construction market survey was carried out after the vote and found 17 per cent more respondents reported a rise in activity in the last three months compared to the 28 per cent seen in the first quarter of the year.
A total of 27 per cent saw a rise in private housing activity. This was down from 35 per cent in the first quarter. Furthermore, only 17 per cent saw workloads in the private commercial sector rise in Q2.
RICS chief economist Simon Rubinsohn said: “The latest results from the RICS construction market survey suggest that the second quarter of the year saw a further moderation in the growth trend which is not altogether surprising given the build-up to the EU referendum.
“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.”
Access to finance was the major barrier to progress, with 35 per cent of respondents reporting a lack of funding was restricting development. Some 60 per cent said planning and regulatory delays were holding back the sector.
Rubinsohn said strong action by the Bank of England, including the £250bn monetary stimulus, should help alleviate some pressure on the sector.
“Encouragingly, the swift actions of the Bank of England in creating additional capacity for the banking sector to provide funding to meet demand should help alleviate some of this pressure.
“Nevertheless, 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,” Rubinsohn said.
Scotland reportedly saw workload flatline in comparison to Q1, while in Wales and England growth slowed relative to previous quarters.
Northern Ireland saw growth due to private housing and commercial workloads increasing. Respondents reported 25 per cent of their work was outside Northern Ireland, with 20 per cent expecting this to increase over the quarter.
The survey also highlighted a slowdown in employment, with forecasts of two per cent amended to 0.6 per cent for the second quarter.
Respondents said despite the uncertainty of Brexit, 23 per cent more expect activity to rise in the industry than fall. There is also an expectation workloads will increase by one per cent over the next 12 months. However, this figure is lower than the forecast made in the first quarter of 2.8 per cent.