East of England: Rise in construction sector activity

ACTIVITY levels in the East of England construction sector edged upwards in the first three months of the year according to a new survey.

The Royal Institution of Chartered Surveyors (RICS) said a balance of 4 per cent more surveyors across the region had reported an increase workload rather than a decrease during the period – a significant turnaround from the negative balance of minus 13 per cent in the final quarter of 2011.

Predictions for future construction activity in the region also saw a marked improvement in the first quarter of the year, with 22 per cent more respondents expecting workloads to rise over the coming 12 months.

This is the most positive reading since the third quarter of 2009, and is also reflected in a modest improvement in expectations for employment in sector, even though profit margins are viewed as likely to remain under pressure.

Most parts of the country saw either a rise or a steadier trend in workloads over the quarter. Surveyors in London and the South East reported the highest rises in overall activity, while those in the North recorded the first positive reading since the final quarter of 2007.


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However, overall input costs, such as raw materials and labour, continued to increase in the three months to March with a net balance of 25 per cent more respondents reporting rises in outlays.

RICS chief economist Simon Rubinsohn, said: “The start of the year saw a cautious level of optimism develop across the UK construction industry.

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“Workloads rose across the sector, albeit modestly, and this looks as though it could continue over the next 12 months. Promisingly, this could also result in an increase in the numbers of jobs created in the sector.

“There are of course still significant hurdles to overcome. Finance for development remains a problem as does macro economic uncertainty. On top of this, the public sector will continue to scale back its capital spending programme putting ever more pressure on the private sector and institutional investors to deliver.”

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