Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Credit crunch has hit construction, says report

A slowing housing market has dampened confidence of the UK construction industry, making it unlikely that the Government will reach its housing targets, according to the latest Royal Institution of Chartered Surveyors (RICS) Construction Market Survey.

Growth in construction workloads eased back in the fourth quarter as house builders and businesses were hit by the effects of the credit crunch and demand for housing fell away.

The report also states that new enquiries for housing grew at the slowest pace since 2006.

RICS senior economist David Stubbs said: “A slowing housing and commercial property market, following the credit crunch and the Northern Rock turmoil have started to hit the construction sector.

“Current financial instability is rocking market sentiment and may see the industry enter a period of uncertainty. Doubts are likely to intensify over the ability of the Government to meet its ambitious house building targets. Indeed, it is worth noting that new housing starts have already begun to stagnate in recent quarters.”

The outlook for profit remains gloomy with surveyors continuing to expect below average profit margins. Equally, confidence that workloads will increase has fallen for the fourth consecutive quarter, although it remains above the survey’s long run average.

However the RICS survey found that skill shortages remain low as the industry continues to employ labour from EU accession countries and that the outlook across the UK varied, with the Scottish construction industry outperforming other regions with workloads experiencing eight quarters of rapid growth