Despite ongoing challenges, infrastructure projects are driving growth and stabilising the UK construction sector’s outlook, although alarm bells are ringing over sector setbacks, the latest industry findings reveal.
The UK construction sector shows a mixed but cautiously optimistic outlook, according to the Royal Institution of Chartered Surveyors (RICS) UK construction monitor data for the second quarter.
While overall workloads have remained flat, expectations for the next year suggest modest growth, particularly within infrastructure.
Infrastructure projects, notably energy and water/sewage, continue to outperform other sectors, with net balances up 34 per cent and 27 per cent, respectively.
However, overall construction activity dipped three per cent.
This sentiment is echoed by S&P Global’s UK Construction PMI for July, which recorded the sharpest downturn in more than five years, driven by declines in residential building.
Brian Berry, chief executive of the Federation of Master Builders, warned that July’s downturn should raise “alarm bells” for both industry and government, undermining the ambition to deliver 1.5 million new homes.
“Positive government policy reforms to speed up the planning system; introduce greater borrowing flexibility; and upskill the workforce are failing to unlock the much‑needed momentum to drive economic growth,” he said.
A more positive outlook emerged for repair and maintenance, however, which RICS noted was up five per cent, while private residential and non-residential projects are expected to see moderate gains of 15 per cent and 9 per cent, respectively.
Challenges persist, notably labour shortages and planning and regulatory delays, which 61 per cent of professionals cited as key obstacles.
Confusion around the Building Safety Act and limited resources for the Building Safety Regulator have exacerbated the issue.
RICS chief economist, Simon Rubinsohn noted that while there is more optimism looking forward, the outlook remains modest, with planning still seen as the key barrier to growth.
He added: “Given that planning continues to be viewed as the major factor hindering the industry from upscaling its building programme, it is quite conceivable that the passing of the Planning and Infrastructure Bill will in due course see industry expectations move onto a firmer footing.”
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