FILE PHOTO: A woman exercises with a dog near the financial district of the City of London in London, Britain on April 30, 2021. REUTERS / John Sibley
LONDON (Reuters) – The UK construction sector sees its largest workload surge in five years, led by strong demand for housing and the resumption of other projects as the coronavirus pandemic subsides. This was the result of a quarterly poll on Thursday.
The Royal Institution of Chartered Surveyors said members expected profit margins in the sector to increase for the first time since 2019 and that recruitment and workload would increase in the coming months.
“The signs are that the industry has adapted relatively well to COVID-related work practices, with most respondents in the survey having little impact on productivity,” said RICS chief economist Simon Rubinsohn.
The workload balance rose from +2 in the fourth quarter to +26 in the first quarter of 2021, its highest level since the beginning of 2016. Private housing construction saw the largest increase, followed by infrastructure. Social housing, public works, and industrial and commercial projects also increased.
The RICS survey took place between March 12th and April 11th.
The UK property market outperformed the economy as a whole during the pandemic last year due to a tax cut on home purchases and an increase in demand for larger houses outside of city centers that are better suited for home working.
According to RICS, the biggest constraint on construction has now been a shortage of building materials rather than the funding difficulties experienced in previous quarters.
Productivity in this sector has decreased by about 5% due to worker social distancing requirements. However, this was less of an impact than the evaluators had expected when the new regulations were introduced last year.
Official February data still showed production was 4.3% lower than a year earlier. However, other private sector surveys have also indicated rapid growth in recent times. In March, IHS Markit’s purchasing managers index for the construction sector recorded the largest increase in production since 2014.
Reporting by David Milliken; Adaptation by William Schomberg