London’s construction market appears to be losing patience with Brexit uncertainty, as output growth gains speed and workload expectations gather pace for the year ahead.
According to a quarterly industry survey by RICS, 14 per cent more respondents reported an increase in construction workloads across London in the second three months of 2019. This is up from a minus two per cent net balance in the first quarter of the year.
Workloads in the London infrastructure sector also improved in the second quarter, as did those in private housing, social housing, commercial non-housing and public non-housing.
Meanwhile, workloads for the year ahead are projected to be resilient in housing, with 23 per cent of public sector and 27 per cent of private sector surveyors anticipating a rise in activity.
RICS’ market confidence indicator – a composite measure of workload, employment and profit margin expectations over the coming 12 months – rebounded to 21 per cent from 13 per cent in the first quarter.
RICS Senior Economist Jeffrey Matsu said: “Three years on and the long, unrelenting shadow of Brexit uncertainty is testing the mettle of the construction industry.
“After a prolonged period of delays and underinvestment, businesses now appear to be fed up and are proceeding cautiously with new hiring and intentions to invest.
“While much of this is likely to be backfilling or maintaining existing capacity, the requirements of larger projects such as Hinkley Point C and HS2 are constraining growth opportunities elsewhere.
“With the range of possible outcomes related to Brexit as wide as ever, we expect to see continued volatility in the construction output data but in the meanwhile foresee workload activity stabilising.”
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