Brexit indecision testing industry’s patience, says RICS

The Royal Institution of Chartered Surveyors has said increasing workloads were a sign that the construction industry was losing patience with ongoing Brexit indecision.

Output growth has accelerated, while workload and employment expectations gathering pace for the year ahead, according to the RICS Construction and Infrastructure Market Survey for the second quarter.

This quarter, 16% more respondents reported an increase in construction workloads, up from a +9% net balance in the first quarter. 

Public housing reported the strongest rise in workloads with 26% more respondents citing an increase rather than a decrease. This was compared to 6% in the first quarter.

Jeffrey Matsu, RICS Senior Economist, said: “Three years on and the long, unrelenting shadow of Brexit uncertainty is testing the mettle of the construction industry.

“After a prolonged period of delays and underinvestment, businesses now appear to be fed up and are proceeding cautiously with new hiring and intentions to invest.”

Following a dip in the first three months of the years, workloads in the infrastructure sector improved in quarter two and there was also modest growth in commercial and public non-housing activity.

Looking to the year ahead, workloads are expected to be most resilient in the private housing and infrastructure sectors with 27% and 25% more surveyors, respectively, anticipating activity to rise rather than fall.

Capacity continues to constrain potential activity with 38% more surveyors having to increase headcount in the past three months to support new work, despite the ongoing recruitment challenges.

Skill shortages continue to pose a significant challenge with half of respondents saying there is a shortage of quantity surveyors.

Despite the continued Brexit uncertainty, the RICS market confidence indicator – a composite measure of workload, employment and profit margin expectations over the coming twelve months – rebounded to 21% from 13% in the first quarter.