The UK construction confidence is rising as house builders are enjoying improved optimism amid a 15 per cent rise in private housing, but spending plans reveal ongoing caution
The UK property market is showing signs of recovery and the UK construction confidence is seeing a rise as house builders are enjoying improved optimism amid a 15 per cent rise in private housing, but spending plans reveal ongoing caution.
Following the general elections, the UK property market is looking up as new properties are coming onto the market as the pent-up demand is released.
Workloads across the UK’s construction and infrastructure sector stabilised at the end of last year, according to the Q4 2019 RICS Construction and Infrastructure Market Survey.
Respondents who reported a rise in business activity outweighed those reporting a fall by 12 per cent. This is still well below workloads seen before the 2016 Brexit vote, when those reporting higher workloads tipped the scales by 36 per cent.
Private housing continued to see strong growth, with 15 per cent more chartered surveyors reporting a rise in work. Building of council housing has also risen – and 34 per cent more surveyors reported an increased rather than decreased expectations for more in the next twelve months.
With 45 per cent of the responses to the latest survey coming in post the General Election result, the RICS market confidence indicator rose to 35 per cent in Q4, suggesting the end to some uncertainty has renewed confidence in the market.
But uncertainty over the next stages of Brexit is still holding back investment.
A quarter more surveyors will likely decrease investments on fixed assets including equipment and software in 2020. A third more intend to curtail workforce development and training.
However, when asked how business enquiries for new projects or contracts have fared in the past three months, 16 per cent more respondents report an increase rather than a decrease.
Also, despite ongoing recruitment challenges, and with surveyors continuing to report full order books, hiring is healthy.
A net balance of 39 per cent of respondents have increased their headcount in the past three months. Two fifths (42 per cent) of respondents still anticipate skills shortages to impact growth across the sector for the future.
RICS economist, Jeffrey Matsu, says that the General Election result last month provided a welcome relief to market confidence with the anticipation of additional fiscal spending to be announced at Spring Budget pushing year-ahead workload expectations higher. That said, the yet-to-be-known relationship with the EU has kept the economic outlook fragile which is affecting businesses intentions to invest.
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