Private sector construction continues upward trend

Private sector construction showed further signs of recovery in the second quarter of 2011.

According to the latest RICS construction Market survey, 3% more chartered surveyors reported a rise in private housing construction – and 16% more for private commercial works.

It is the first time since 2007 that private housing has been positive for two consecutive quarters.

However the squeeze in public sector work continued to deepen with 17% more surveyors reporting a fall in public housing construction.

Overall the latest data signals a growing divergence between private and public sector workloads.

Total construction workloads across the UK edged down in Q2 from a net balance of 6% to 2% – although over half of all respondents noted no actual change in workloads.

The regional variation in workloads was also apparent with workloads in London and the South East continuing to rise, while in the rest of the country workloads were flat or slightly down.

The main issues for surveyors continue to be a highly competitive tendering environment and a continued lack of funding for projects.

Commenting on the latest survey, RICS chief economist, Simon Rubinsohn said:

“The results of the latest RICS Construction Survey clearly highlight the impact of the austerity package being implemented by the government.

“Public sector related construction projects are being reined in while some tentative signs of recovery are visible in the private sector.

“It is particularly encouraging that development in the private commercial sphere is continuing to pick-up in the face of the challenging economic backdrop.

“Residential workloads also continue to edge upwards but, for the time being, at an insufficient pace to meet medium term housing need.”