Construction activity up - not down

Despite the country’s slip back into recession, activity in the construction industry actually rose slightly in the first three months of this year, according the Royal Institution of Chartered Surveyors (RICS).

Its latest Construction Market Survey recorded a "cautious level of optimism" across the whole sector. Workloads rose, albeit modestly, and respondents said they expected activity to continue improving over the next 12 months. RICS said this could also result in an increase in the numbers of jobs created in the sector.

The RICS data appears to contradict figures from the Office for National Statistics, which reported that construction output fell by 3% and helped push the UK into a double dip recession.

Workloads
RICS reported that 8% more chartered surveyors across the UK reported increases rather than decreases in workloads.

"This is a notable improvement of the negative reading seen towards the end of 2011 and reflects a marked contrast in performance between the private and public sectors," said RICS Chief Economist Simon Rubinsohn. "The former is now showing some signs of life with workloads in the commercial sector in particular picking up. On the other hand, public sector construction activity remains depressed."

21% more respondents expect workloads to rise over the coming 12 months, the most positive reading since the early part of 2008. This is also reflected in a modest improvement in expectations for employment, although profit margins remain under pressure.

Most parts of the country saw either a rise or a steadier trend in workloads over the quarter. Surveyors in London and the South East reported the highest rises in overall activity, while those in the North recorded the first positive reading since the final quarter of 2007. The picture in Northern Ireland remains more problematic with activity levels still slipping, RICS said.

The cost of raw materials and labour continued to rise in the three months to March, the survey said.