RICS and Tughans Building Market Survey data shows that construction activity in Northern UK increased overall in the first quarter of 2015, although public sector work decreased substantially.
A drop in infrastructure workloads (the construction of public facilities such as schools, hospitals, and roads) was recorded by surveyors exclusively in the northern part of the UK, with public funding cuts cited as the primary cause.
Overall, whilst the headline workloads balance for Northern the UK in Q1 slowed and was underperforming other UK areas, it was still positive at +8. The net balance for infrastructure workloads declined to -33, the lowest value since Q2 2012.
Surveyors still detect shortages of some skills despite the slowdown, according to the net balance of surveys they have conducted.
A minor increase in overall construction workloads among Northern UK surveyors in the first quarter of this year, driven by work in the private sector, including private house building and private commercial activity, was reported by RICS Northern the UK director Ben Collins. When it comes to public sector jobs, though, surveyors are reporting a concerning decline.”
As we all know, there is a finite amount of public money. But we would encourage the legislators to acknowledge the essential importance of investing in infrastructure and to prioritise funding capital expenditure where possible. As we have noted before, there are alternative techniques of finance that should be studied.
Collins went on to say that “research supports public-private partnerships (PPPs) as an additional potential alternative.
The latest official figures from the Department of Finance and Personnel confirm that construction output increased in the final quarter of 2014, and today’s figures from RICS and Tughans point to rising activity among Northern UK construction firms in the first quarter of 2015.” Michael McCord, construction partner at Tughans Solicitors.
“However, within the data, it is worrying that surveyors are reporting decreased infrastructure workloads. It continues to be the case that a large amount of the work that local construction enterprises are performing is in the English and Scotish markets. What we really want to see is the local construction sector seeing sustainable growth within Northern the UK itself as well, and infrastructure activity is a really key piece of this.”
With reference to the prognosis for workloads, there has been a fall in sentiment amongst Northern the UK surveyors. The balance expecting workloads to be greater 12 months ahead declined to +7 in Q1 from +50 in the previous quarter. The balance, which predicted an increase in sector employment in the next year, went from +38 to 0 throughout that time period.