Construction experts across the
United Kingdom painted a positive picture for the industry over the next year
with strong levels of activity expected despite mounting concerns around
sourcing materials and labour, this according to the latest RICS
construction survey for the final quarter of 2021.
In terms of workloads for Q4
2021, +33% of respondents said they continued to see increases in demand for
construction work (the same level as reported in Q3). New infrastructure
projects are seen to be behind the much of the increase in workloads, with a
net balance of +40% - with energy developments particularly leading the way.
Elsewhere the private housing sector also continued to show solid momentum with
a net balance of +37% of respondents reporting new works in this area.
Looking to the year ahead,
expectations of upcoming workloads edged up to a net balance of +45%.
Infrastructure continues to be viewed as likely to lead the sector but both the
private residential and non-residential works are anticipated as also
delivering strong growth in output. The government's newly announced ‘Levelling
Up’ white paper, which sets out how billions in funding will be allocated
toward regenerating towns and cities across the UK, could also support
construction workloads through new infrastructure, housing and non-residential
works.
Business enquiries were still
firm in the final quarter (+37% in Q4 2021) which is also consistent with a more
upbeat outlook for activity looking out over the next twelve months. Additionally,
+10% of respondents also said profit margins are now anticipated to increase
over the course of 2022 compared with just +2% in the last survey – which
reflects the upbeat picture of the year ahead.
Despite the positive picture,
concerns around the availability of materials (84%) and labour (77%) suggested
these problems continue to dominate the UK construction sector – with factors
like Brexit and the ongoing COVID-19 pandemic giving building firms a headache.
In terms of skilled labourers,
65% of respondents saying they had difficulties finding bricklayers and
carpenters to deliver projects (although this was slightly less apparent for
other skilled trades like plasterers and electricians). That said, the estimate
for material costs is expected to jump by a further 9% over the period in
question with skilled labour costs rising by more than 7% and unskilled costs
by between 5 and 6%.
Simon
Rubinsohn, RICS Chief Economist, commented: “There is clearly an upbeat tone to the
feedback received from across the construction industry. However, the concerns
around labour and in particular, skilled labour are just not going away.
“The long-term fix is to
attract more younger people to the sector but that may be insufficient to
address the immediate problem which significantly, is being reflected in
expectations for a sharp uplift in wage costs over the next year.
“The presumption from
professionals working in the industry is that this rise in pay will help
provide a short-term fix as the strong projections for activity through the
course in 2022 are premised on a further rise in headcount.”
Bradley
Tully, Senior Public Affairs Officer at RICS, said: “The levelling-up agenda offers
important opportunities for the construction sector to play a vital role in transforming
areas that are in need of regeneration, and to demonstrate the power of the
built environment in tackling inequalities.
“In order to create thriving
places where people can live and work, we are clear that the levelling-up
agenda must be underpinned by a reformed planning system that offers greater
certainty, provides for sufficient local accountability and allows for the
timely delivery of vital social infrastructure.”
