Construction hits lowest level in a decade
Wednesday, 02 Jul 2008 08:18
Construction hits lowest level in a decade
Construction levels in the UK economy are falling at the fastest rate since the first quarter of 1995, according to the Royal Institution of Chartered Surveyors (Rics).
Some 19 per cent more chartered surveyors reported a fall in construction orders than a rise, a reversal of 11 years of uninterrupted growth.
While one per cent more surveyors reported a rise in orders in the first quarter than a fall, this is down from 19 per cent in the first quarter of 2007.
Across every region in the survey workloads are now falling, with the sharpest falls taking place in Northern Ireland.
The least heavy falls are taking place in the north, where the pace of decline has moderated in contrast to all other regions in the survey.
Residential property was the bore the brunt of the downturn, with private housing workloads falling at the fastest pace in the survey’s history.
They fell across all regions and sharply, but the net balance was most negative in Wales, Northern Ireland and Scotland.
"Up until now we have been seeing growth in the construction industry slowing down; however these figures show that workloads are actually falling in almost every sector," said Rics senior economist, David Stubbs.
"This decline can be attributed to the lack of availability of debt finances and the fall in prices, which is taking its toll on developers.
"If this pattern continues then the industry will have to start making significant cut backs. This downturn will also have a negative effect on housing targets, which will not be achieved at current levels of output."
Furthermore, expectations for the future of the construction sector were also dire.
Confidence in future workloads fell sharply, reaching the lowest level in the survey’s history, along with employment and profit margin expectations, both of which also hit their lowest ever levels.