Construction will turn a corner in 2013, RICS says

The UK construction market is expected to grow this year, with 15% more surveyors on balance predicting growth in workload over the next 12 months.

The RICS Construction Market Survey also found workloads grew in the final three months of 2012, with 6% more surveyors on balance reporting a rise in activity, with the most substantial gains in infrastructure and private commercial development.

Despite the introduction of the government’s Funding for Lending Scheme, some 89% of surveyors believe that financial constraints are holding the industry back, with around two thirds citing insufficient demand.

Over half also claim that weather conditions have hampered a recovery in the sector.

Elsewhere, input costs grew with 15% more respondents reporting rises rather than falls.

Prices have now been moving upwards since the beginning of 2010.

London and the South-east and the North of England saw overall workloads rise by the biggest margin, while Northern Ireland and Scotland saw activity continue to drop by significant margins.

Simon Rubinsohn, RICS chief economist, said:  “After a truly dreadful year, if one believes the official data, there are signs that 2013 will bring some better news for the construction sector. Most notably, the numerous measures that the government has introduced with a focus on infrastructure appear to be bearing some fruit.

“Critically, competitive pressures in the sector remain intense which is continuing to erode profit margins. And for the time being financing constraints are still an issue although the Funding for Lending Scheme should gradually help to ease this challenge.”