House building continued to slow in Q1 with only 36% more of those working in residential construction reporting a rise in growth rather than a fall over the first quarter of 2016.
House building continued to slow in Q1 with only 36% more of those working in residential construction reporting a rise in growth rather than a fall over the first quarter of 2016.
The latest survey from the Royal Institute of Chartered Surveyors said during the first quarter of 2015 that figure was close to 50%.
Meanwhile private housing workloads rose at their slowest pace since Q2 2013.
Across all sectors the RICS UK Construction Market Survey showed that while 33% more respondents saw workloads rise rather than fall during the last quarter of 2015, this figure dropped by 5% over the past three months.
Confidence in the outlook for the sector also dropped with the number of construction professionals saying that they expected to see workloads rise over the next 12 month outweighing those expecting a fall by 55%.
This is a considerable decrease on expectations from this time last year when 79% more respondents expected to see workloads rise.
Meanwhile, following 4% employment growth in 2015, respondents foresee headcounts continuing to rise over the coming 12 months with a net balance of 41% expecting growth, and a rise of 2% forecast, on average.
Simon Rubinsohn, RICS’ chief economist, said: “On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘we are the builders’ speech, given the government’s significant commitment to this sector.
“One might well ask why growth in private housing workloads is softening at a time when policy is firmly focused on the creation of new starter homes.
“We have long held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.”
Rubinsohn said the survey indicated that planning delays are one of the biggest barriers to growth in the construction sector.
He said: “We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.
“That said, we cannot discount the climate of uncertainty caused by the forthcoming EU referendum.
“We know that a range of sectors have been affected by these issues as investors look to delay any decisions until a final outcome has been determined, and construction is no exception.”
Charles Holland, head of residential development and investment at Marsh & Parsons, said: “There’s been much talk about loosening planning permission and freeing up government land as a way of taking residential construction in the capital up to the next level.
“Both are valid points but addressing the current skills shortage in the construction industry is the real key to unlocking a housebuilding boom.
“With the profession still struggling to replenish the jobs it lost post-financial crisis, a concerted government effort to get more people into building jobs would increase construction output, so we can start hitting the levels of housebuilding the capital urgently requires.”
