Construction market growth slows in the North West

The slowdown was visible across most sectors, Rics found. Housebuilding declined during the last quarter, with a drop in activity across both the private and public sectors.

The survey came a day after the industry entered recession with two consecutive quarters of contraction, and a Civil Engineering Contractors Association survey that warned of “a dramatic slowdown in growth”. The study found that there was also a reduction in the private industrial sector during the three months to the end of June.

The latest UK Construction Market Survey by the Royal Institution of Chartered Surveyors (RICS) reported that growth in construction work in Scotland stalled during the second quarter of this year for the first time since 2013, but continued in the rest of the UK.

However, 27% more contributors still reported a rise in private housing activity – down from 45% in Q1 – while 25% more respondents saw their workloads in the private commercial sector rise rather than fall in Q2. Planning and regulatory delays were also seen as a key issue by 60 per cent of respondents.

Skills shortages also remain a problem for the North West’s construction market – 63% of the region’s construction professionals reported a short supply of quantity surveyors (64%) closely followed by a lack of bricklayers (59%).

Employment is expected to rise just 0.6% for the second quarter compared to the 2% predicted in the previous quarter.

But despite the slowdown in activity across the United Kingdom in the last quarter, the shortage of skills was said to remain a problem. Contributors, on average, said they foresaw their workloads increase by 1% over the next 12 months, which was down 2.8% in the first quarter.

“Let’s wait to see the impact, but we anticipate surge in labour and material costs impacting ability to complete existing jobs”, said Roger Arnold of Martin Arnold Ltd.

The RICS said swift action by the Bank of England to help banks lend should reduce some of this pressure but it warned: “Anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the European Union could see some investment plans in the construction sector scaled back”.

The previous RICS survey on the 21 July, found that the commercial housing market was in the early stages of a downturn due to Brexit uncertainty.