Road and rail boost in UK

By Sandy Guthrie06 February 2017

Road and rail are set to be the fastest growing UK infrastructure sectors over the next 12 months, while national workloads are still positive with private housing displaying the strongest momentum, according to figures from the UK’s Royal Institution of Chartered Surveyors (RICS).

Expectations across the construction sector have now regained the ground lost following the UK’s referendum vote to leave the EU (Brexit), according to the latest RICS Construction Market Survey, for the fourth quarter of 2016.

Following a noticeable dip around the time of the EU referendum, expectations for output growth over the year to come strengthened for the second consecutive report, said RICS.

It added that the 12-month workloads expectations series improved to post a reading of +57%, following +49% in the third quarter and +23% in the second.

Alongside this, employment expectations were found to have improved for the second straight report, with 41% more respondents expecting a rise in construction sector employment over the year to come. As such, both employment and workload expectations have now recovered to their pre-referendum levels, said RICS.

The latest results were said to point to modest growth across the sector in the final quarter of 2016, with 18% more respondents reporting an increase in total workloads.

However, RICS felt that while the data was broadly positive, the anecdotal comments left by chartered surveyors continued to highlight the uncertainty surrounding the departure from the EU dampening investment and activity.

During the fourth quarter, output was said to have increased in most sub sectors except public non-housing. Following the pattern of the last three quarters, the strongest quarterly rise in workloads was reported in the private housing sector, where 27% more respondents cited an increase in workloads, rather than a decrease.

A rise in workloads was also reported in the private commercial and infrastructure sectors.

Looking at the next 12 months, respondents continued to expect the road and rail sub-categories to post the most significant increases in construction output at a national level.

Regionally, expectations for growth in railway output were cited most in London, the North West of England, Yorkshire & Humberside, Wales and the English West Midlands. Meanwhile, expectations for growth in road construction activity come out on top in all other areas of the UK.

Both output and input costs were reported to have risen in the fourth quarter of 2016, with input prices extending a run of uninterrupted growth stretching back to the second quarter of 2010.

Simon Rubinsohn, RICS chief economist, said, “The latest results suggest that the construction sector has shrugged off concerns about the effect of Brexit with key workload indicators remaining firm around the country.

“Indeed, feedback regarding the outlook over the next 12 months is now rosier than it was back in the autumn with more building anticipated as 2017 unfolds.”

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