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Wales and Scotland suffer fastest falls

Wales, Scotland and Northern Ireland suffered greater drops in construction work in the third quarter of the year than the majority of England, according to a poll of surveyors.

The UK Construction Market Survey found a negative net balance in workload in all regions - that is, more surveyors reported a fall in work than reported a rise.

But the Royal Institution of Chartered Surveyors report found that the extent of the declines was greatest in Northern Ireland, Scotland, and Wales and the South-west.

The biggest negative net balance was in Northern Ireland, although the decline slowed a little - from -75 in Q2 to -63 in Q3.

In Scotland the drop off in work declined from -17 to -29, while in the South-west and Wales the net balance fell from -10 to -20.

Both Scotland and Wales published draft Budgets last week, outlining falls in capital spending in line with reduced budgets from the UKgovernment. Northern Ireland is grappling with a similar situation.

Meanwhile, in London and the South-east, workloads declined to a lesser extent, with the net balance falling from 0 to -7. The commercial recovery that contractors are relying on to pick up the slack from public sector cuts has so far largely centred on London.

The decline in construction work slowed in the North-east, North-west, and Yorkshire and Humberside, with a net balance of -6 in Q3, improving from -15 the previous quarter.

In the East Midlands, the West Midlands and East Anglia, the amount of construction work was relatively stable, with work declining from a net balance of -2 to one of -4.

Across the UK, 59 per cent of surveyors questioned said there had been no change in the amount of work they were seeing in the third quarter, while 26 per cent reported a fall and 16 per cent said there was more work.

Over the next 12 months, a net balance of 20 per cent of surveyors expected employment to fall further rather than rise.

The outlook for the coming year also worsened. The net balance for output expectations is at its worst level since the first quarter of 2009.

The majority of surveyors expect profits to fall further over the next year.

RICS chief economist Simon Rubinsohn said: “Government data shows the construction sector has rebounded more strongly than many anticipated but our latest survey casts considerable doubt on whether this improvement can be sustained. The collapse in public funding will inevitably have a major impact on the sector.”

He said smaller businesses were being particularly hard hit by the reduction in construction work available.

“Worryingly, the responses from small businesses operating in the construction industry indicate that they are being squeezed by increased competition for projects from larger firms,” he said.

 

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