Tentative construction recovery
Published:  21 May, 2010

LONDON: The building industry is showing "tentative signs" of recovery, according to the latest survey of sentiment by the Royal Institution of Chartered Surveyors (RICS).

Workloads in the first three months of this year turned positive, its said, the first time this has happened since the recession.

However, the headline figures disguise divergence within the building trade and geographically. Private commercial and housing activity has expanded, as has the much smaller public housing sub-sector. But surveyors in the private industrial and infrastructure sectors reported falling workloads.

The North, Scotland and Northern Ireland continue to report sharp declines: the Midlands fare better, and the South best. The Rics' findings reflect similar survey evidence from the Chartered Institute of Purchasing and Supply. The general picture is of uneven recovery, with finance constraints still holding back projects.

The workload of construction firms in Northern Ireland is still falling. Jim Sammon, RICS Northern Ireland spokesperson said: "The fear of large public spending cuts is a major factor depressing the local construction market, which is very public sector-driven."

There was also uncertainty in the market because of the Irish Republic's bad bank Nama, which was set up to buy and manage mainly bad property loans held by Dublin-based financial institutions, he said.

Out of all UK regions, NI has the most chartered surveyors experiencing declining workloads in the first three months of 2010, the report suggests.

The situation was twice as bad as in Wales, the next worst performing area.

Factors cited by those responding to the survey included public sector indecision ahead of expected budget reductions; project delays because of contractor insolvencies; difficulties with the planning process; and funding problems.




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