Sign up to BQ Breakfast to receive daily news:

Construction lift to follow 'horrendous' year

Thursday 10 January 2013 5:00

An upturn in the North East construction market is on the cards for this year, a new report has forecast, although growth is predicted to be sluggish at best.

New data from the RICS construction market survey shows that last quarter 25% more chartered surveyors across the region reported that they expect workloads to grow over the coming twelve months but this follows what was a horrendous year for the sector.

This upturn is reflected in the small increase in reported workloads in the final three months of 2012.

Over this period, a net balance of 10% more respondents indicated that activity had increased, with the most substantial gains being seen private housing and private commercial development.

Despite the introduction of the Funding for Lending Scheme, though, 91% of surveyors believe that financial constraints are holding the industry back with around two thirds citing insufficient demand.

Meanwhile, 70% claim that weather conditions have hampered a recovery in the sector.

Across the country, London and the South East and the North of England saw overall workloads rise by the biggest margin, while Northern Ireland and Scotland saw activity continue to drop by significant margins.

RICS North East construction spokesperson, Michael Henning of Summers Inman Property and Construction Consultants said: “After a truly dreadful year, if you believe the official data, there are signs that 2013 will bring some better news for the construction sector.

“However, we need increased spending across both public and private sectors. New government plans for education and housing spend only scratch the surface of what is needed.

“Critically, competitive pressures in the sector remain intense which is continuing to erode profit margins. And for the time being financing constraints are still an issue, although the Funding for Lending Scheme should gradually help to ease this challenge.”