RICS: UK construction sector's output will improve in 2013

Published by Max Salsbury for 24dash.com in Housing and also in Development

The UK building sector's output will marginally improve this year, so forecasts the latest RICS construction market survey.

In 2012's final quarter, 15% more surveyors across the country said that they expected their workloads to increase over 2013.

RICS has described 2012 as a "horrendous year for the sector".

The optimism is reflected in the small rise in reported jobs in 2012's Q4. Over the period, a net balance of 6% more respondents said that activity had increased, with the largest gains coming in infrastructure and private commercial development.

Around two thirds of respondents blamed a lack of demand for poor state of the sector as a whole, and 89% said they believed financial constraints are holding the industry back. Over 50% said that the weather was hampering recovery.

The survey also found that input costs are continuing to climb, with 15% reporting rises rather than falls. RICS say that prices have now been rising since the start of 2010 and have been "significantly" outpacing output costs for five years.

London, the South East and the North of England saw workloads rise by the greatest margin, while Northern Ireland and Scotland felt the biggest drop in activity.

Simon Rubinsohn, chief economist at RICS, said: "After a truly dreadful year, if one believes the official data, there are signs that 2013 will bring some better news for the construction sector. Most notably, the numerous measures that the government has introduced with a focus on infrastructure appear to be bearing some fruit.

"Critically, competitive pressures in the sector remain intense which is continuing to erode profit margins. And for the time being financing constraints are still an issue although the Funding for Lending Scheme should gradually help to ease this challenge."