Building firms stall on public work worries
CONSTRUCTION activity stagnated in the final quarter of 2011, the Royal Institute for Chartered Surveyors (RICS) revealed yesterday, with firms expressing doubts that the government’s plans to boost private investment in infrastructure will work.
The construction market survey showed a net balance of seven per cent of firms facing falling workloads, compared with one per cent previously.
For public housing and works the picture is even gloomier – a net balance of 22 per cent reported falling workloads, from 17 per cent recorded in the third quarter.
In his Autumn Statement chancellor George Osborne pledged to increase investment in infrastructure, in part by harnessing private funds – including a proposed £20bn from pension funds.
However, only 14 per cent of surveyors expect the government to be successful in fulfilling the pledge and generating sufficient finding for planned infrastructure projects.
A spokesman from the National Association of Pension Funds, which is involved in negotiations, said such concerns are unfounded.
“We are in on-going talks with the Treasury and the Pension Protection Fund to develop a new platform to encourage investment in infrastructure,” he told City A.M.
“Pension funds are looking for inflation-linked, long-term investments and infrastructure projects could be a good fit.”