Uncertainty caused by the UK’s Brexit vote has caused a slowdown in construction growth over the summer, according to the latest report from surveyors.
The Royal Institution of Chartered Surveyors (Rics) said that while 19% more chartered surveyors reported that construction workloads in the UK had risen, rather than fallen in the third quarter, this was the lowest reading in just over three years.
House building for private homes continued to expand, with 27% more surveyors reporting an increased workload than a fall, but in private commercial development fewer surveyors had seen increases in work than in quarter two.
Rics said financial constraints, anecdotally linked to the decision to leave the EU, had been cited by 69% of respondents as the most significant barrier to growth in the third quarter of the year. Planning and regulatory delays were the next most substantial factor, named by 55% of respondents as problems.
In London and the south-east of England, Rics reported a “sharp moderation in growth” as a result of a slowdown in activity in the commercial sector. It added that workloads have stayed “broadly flat” in Scotland for a second quarter.
Jeremy Blackburn, Rics UK head of policy, said: “It seems that when it comes to private housing, we are indeed the builders. The government’s commitment to this critical sector has clearly had a positive impact on growth.”
Those surveyed seemed optimistic that construction would pick up, with 49% more surveyors saying they expected a rise in workloads over the next year than a fall. On average, they expected activity to rise by 2.5% over the next 12 months.
Expectations for employment growth had also improved with 35% more respondents forecasting a rise rather than a fall – about double the proportion in quarter two.
However, workload and employment expectations were still lower than before the spring, and anecdotal evidence from surveyors suggested that the Brexit vote had made them concerned about their workoads.
Simon Rubinsohn, Rics’ chief economist, said: “The picture painted by the Q3 survey is one of subdued growth, and although expectations have improved following the immediate shock of the vote to leave the EU, anecdotal evidence from respondents suggests that much uncertainty still remains on the outlook for the year ahead.”
