Construction growth strongest for three years

The amount of construction work grew in the first quarter of the year, the first growth since spring last year, according to the latest figures from the RICS.

With a balance of 6% more survey respondents reporting growth than decline, the figure was actually marginally the fastest growth since the industry went into recession in 2008.

The RICS said its quarterly Construction Market Survey showed the growth was down to a big increase in the volume of private commercial work and private housing. This more than offset continuing declines in public spending on construction. The figures yet again highlight the difference with the official government output figures, which claim that the construction economy contracted by 4% in the first three months.

The overall small growth hid huge regional differences, with London and the South-east recording a balance of 24%, and Northern Ireland recording a contraction of 68%.

A balance of 62% of respondents said materials prices were rising. The survey was also the first time since the first quarter of 2008 that a positive balance had been recorded in terms of future jobs prospects, with a 5% balance saying they were likely to take more people on.

Simon Rubinsohn, chief economist at the RICS, said the figures provided a chink of light to the industry.”The stronger reading for construction output workloads in the first quarter of 2011 compared with the final three months of 2010 contrast directly with recent ONS data - strengthening the case for an investigation into the quality of the official statistics,” he said.

“We are particularly encouraged by the indications that the private sector is not only seeing an increase in workloads but planning to raise employment.