New Survey Reveal That Construction Failed To Pick Up During Second Quarter In West Midlands

August 21, 2012

New Survey Reveal That Construction Failed To Pick Up During Second Quarter In West Midlands

A survey, conducted by the Royal Institute for Chartered Surveyors (RICS), shows that the amount of infrastructure construction projects across the West Midlands failed to pick up during the second quarter of 2012, despite the government’s ongoing attempts to boost the sector through private sector investment.

Infrastructure workloads across the West Midlands were flat during the three months to June, with little movement seen in the sector since 2009, according to the RICS’s Construction Market Survey for the second quarter of 2012.

This low level of activity was reflected across the entire construction sector in the region with two per cent more respondents reporting falls rather than rises in workloads. However, it is the public sector where the pressure continues to be greatest.

Chief Economist at the Royal Institute for Chartered Surveyors, Simon Rubinsohn, said: “Infrastructure workloads failed to pick up despite the government’s attempts to boost the sector through private investment. More action to back up the rhetoric is urgently needed if the construction industry is to play a meaningful role in driving the economy forward over the next few years.”

Perhaps unsurprisingly, given the economic climate, profit expectations in construction in the West Midlands continue to deteriorate, with the net balance falling from -31 to -33 per cent, reflecting the continuing pressure on margins as input costs rise rapidly whilst output prices fall. Surveyors note that increasing competition is leading some companies to bid for work at below cost price in order to secure contracts.

Regional variations were once again evident across the UK, as the South, Wales and the Midlands saw overall workloads stabilise, while the North, Scotland and Northern Ireland experienced further declines.

RICS spokesperson for the West Midlands, Alan Carter of office refurbishment and fit-out company ABC Solutions said: “The outlook from the survey is slightly encouraging for the West Midlands with the optimistic prediction that workload is set to rise. However, if there is not a corresponding rise in margins, some companies that have managed the grim climate so far, may struggle to survive.”

Looking ahead, in spite of the downbeat picture for the sector over the three months to June, surveyors in the West Midlands are cautiously optimistic, with a net balance of 18 per cent more surveyors predicting workloads in the area to rise over the coming twelve months.