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Surveyor workloads rise for first time since onset of credit crunch

Construction workloads rose for the first time in two years during the first quarter of 2010, according to new figures - but the regional picture varies wildly.

The Royal Institution of Chartered Surveyors Construction Survey for the first quarter of 2010 showed a positive balance of surveyors reporting increased workloads during the first three months of the year.

Of those surveyed, 24 per cent experienced a rise in work, while 19 per cent suffered a fall and the rest did not notice any change.

The last time more surveyors saw work rise than saw it fall was during the first quarter of 2008, before the full effects of the credit crunch hit the industry.

The positive reading of +5 per cent is a big turnaround from the fourth quarter of 2009, when the net balance was -12 per cent, and reverses a decline that has spanned seven consecutive quarters.

But it hides a big difference in the performance of individual sectors and regions.

Chartered surveyors in London and the South-east had a sharp turnaround in workloads, with the net balance swinging from -15 per cent to +21 per cent. The Midlands and East Anglia rose from -9 to +10.

But there was deep gloom for Northern Ireland, where the balance fell from -37 per cent to -59 per cent, and for Wales, which declined from +20 to -25. The South-west also fell, from -9 to -11.

The recovery was also predicted to be very shallow, with expectations of relatively flat workloads over the coming year.

A balance of just 4 per cent of surveyors expected workloads to increase over the next 12 months.

RICS chief economist Simon Rubinsohn said: “The construction sector seems to be finally lifting its head above the recession parapet, but the continuing lack of development finance remains a major obstacle to a sustainable recovery, with surveyors still pessimistic about future prospects.”

He added that those regions more reliant on the public sector for work were experiencing tougher starts to 2010 - and had greater fears for the future.

“The poor result in Wales could be because of its exposure to the public sector, which is a big contributor to the Welsh economy. The north is in a similar situation.

“It is easier to obtain finance in London and the South-east, and it’s easier to attract foreign capital.”

The private commercial market had the biggest turnaround of all sectors, moving from a balance of -11 per cent in Q4 2009 to +17 per cent in Q1 2010.

In the past month, high-profile schemes such as The Heron and New London Bridge Place - between them worth £330 million - have signed up contractors.

Other large commercial projects in the City of London are also expected to be given the go-ahead after being put on hold due to the credit crunch.

Skyscrapers such as the Walkie Talkie and the Cheesegrater, together worth almost £600m, are close to being signed off as developers talk to partners over financing.

By the end of 2009, the value of construction work had fallen by around £20 billion from its peak, with around half of this fall attributable to the commercial sector.

Private housing also had a sharp turnaround from the end of 2009, moving from a net balance of -17 per cent to a net balance of +3 per cent.

Survey respondent Robin Goddard, of Brodie Plant Goddard, said: “There has been a recent rise in the number of enquiries and it is evident that housebuilders in particular are becoming more active and are looking to purchase and develop new sites.”

But public sector housing work only rose from a balance of -1 per cent to a balance of +3 per cent, while other public sector work edged up from -5 to zero.