Increased construction activity continues in Wales as national workload reaches 20 year high

Sharp rise in private housing and private commercial activity pushes up National workloads at fastest rate since 1994

A sharp rise in private housing and private commercial activity pushes up National workloads at fastest rate since 1994 while momentum in Wales remains high.

Private housing and private commercial construction activity fuelled a record workload in Q3 2014, according to the RICS UK Construction Market Survey – the highest recorded since 1994. 

In Wales, construction activity in private housing, private commercial and private industrial remain high despite the skills shortage and 39% more chartered surveyors are reporting a rise in activity (up from a net balance of 35% in August). In the region 48% of respondents cited a lack of quantity surveyors, while 41% cited a shortage of other construction professionals and 47% citing a shortage of blue collar workers.

The private housing sector grew robustly across all parts of the UK, with the London and the South East regions seeing the strongest growth. Throughout Wales a net balance of 52% more surveyors reported an increase in activity in the private housing sector, up 10% on Q2. In the private commercial sector, workloads also increased in Wales on the August figures, with a net balance of 48% more chartered surveyors reporting an increase in activity. 

However, while still positive, workloads in infrastructure saw much more balanced growth across Wales with 28% more chartered surveyors seeing activity levels rise. 

Across the whole of the UK, the main factors which were found to be limiting building activity were a shortage of labour, followed by access to finance and a shortage of materials (both a net balance of 58%). Significantly, demand for bricklayers increased strongly on the previous quarter, with 71% of respondents now saying that this is an issue (compared to 59% in Q2 2014). Planning and regulation factors were the fourth highest limiting factors (a net balance of 51%).

However, despite these concerns, the strength and breadth of the growth that is being reported is promising and feeding expectations for further growth over the coming year. As a result, 74% more respondents in the region expect workload to increase over the next 12 months, 56% more surveyors expect to see profits increase, rather than decrease, and 61% more respondents expect to take on more people in response to the rising workloads. 

Neil Brierley FRICS, Chairman of RICS Wales and Director, Head of Operations (Wales and South West) at Faithful+Gould commented: “The Construction activity figures in Wales are very encouraging. It is particularly pleasing that both housing and the commercial sectors are showing sustained growth, given the scale of the sectors importance to the Welsh Economy. 

“In Wales we need the Welsh Government to continue being supportive in enabling the construction industry to grow and allow us to build on the strong recovery that is happening. That is why we welcome the initiative to allow Welsh Government to be approached directly for decisions on major projects, and above all the focus on long term Infrastructure needs through the Wales Infrastructure Investment plan. This pipeline is vital not only for addressing the Infrastructure needs of Wales, but also smoothing out at least in part, the skills shortages caused by market peaks and troughs as shown in these figures.

“As an industry we need to respond by increasing investment in training and development of the workforce at all levels and finding ways to encourage new entrants into construction, property and infrastructure sectors.”

Commentating on the data, Alan Muse, RICS Director of Built Environment, said: “Unprecedented housing demand, the bounce back from a very deep recession and government’s commitment to invest £36 billion in over 200 infrastructure projects is driving much-needed confidence across the industry, translating into UK workloads sentiment now standing at its highest level in two decades. 

Of course factors impacting construction activity, such as skill shortages and material shortages, must be addressed if we are to avoid capacity constraints and promote productivity and efficiency in the workplace, but it is equally important that the underlying framework for effective planning and delivery of projects is in place to ensure long-term construction growth that is evenly spread across the UK.

UK Government must now ensure it builds on these foundations of confidence with the mechanisms to get house building and infrastructure projects out of the pipeline and into the ground. RICS believes a National Infrastructure Delivery Plan and enforced local planning are among the measures it recommends to make this happen.”

Leave a Reply

Your email address will not be published. Required fields are marked *