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Margin squeeze forecast for 2018 in RICS survey

Construction workloads are expected to increase over the next 12 months but margins will be squeezed, according to a survey by the Royal Institution of Chartered Surveyors.

The RICS Construction and Infrastructure Market Survey for the third quarter found a net balance of 45 per cent of respondents expected workloads to rise over the next 12 months.

However, only 12 per cent expect margins to rise, on balance, as higher input costs bite.

Respondents said the main obstacle to growth was access to finance, with a net balance of 69 per cent citing this as a difficulty. 

Acquiring labour was also singled out as a barrier to growth, with 62 per cent of respondents saying it was a problem.

RICS senior economist Jeffery Matsu said: “While activity in the sector has moderated, growth and growth expectations remain in positive territory.

“Uncertainties due to Brexit continue to weigh on companies’ investment and hiring decisions, and banks appear to be adopting a more cautious stance to providing finance.

“Meanwhile, challenges related to an inadequate supply of skilled labour are as pronounced as ever.”

RICS found that activity in the construction sector remained strong.

Its Q3 survey found that 22 per cent of respondents reported rising workloads.

Private housing and infrastructure surveyors saw the largest increases in work, with 33 per cent and 21 per cent respectively reporting rises, on balance.

Workloads in commercial building also increased, with a balance of 20 per cent reporting a rise, but this was down compared with the average for the past three years.

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