By David Milliken
LONDON (Reuters) – Britain’s construction sector is seeing the biggest increase in its workload in five years, led by strong demand for housing and the resumption of other projects as the coronavirus pandemic eases, a quarterly survey showed on Thursday.
The Royal Institution of Chartered Surveyors said members expected profit margins in the sector to increase for the first time since 2019 and for recruitment and volumes of work to rise over the coming months.
“The indications are that the industry has adjusted relatively well to COVID-related work practices with most respondents to the survey suggesting only a small hit to productivity,” RICS Chief Economist Simon Rubinsohn said.
The balance for workloads rose to +26 in the first quarter of 2021 from +2 in the fourth quarter, its highest since early 2016. Private residential construction saw the biggest increase, followed by infrastructure. Social housing, public-sector works and industrial and commercial projects also rose.
The RICS survey took place between March 12 and April 11.
Britain’s property market has performed much more strongly than the wider economy during the past year’s pandemic, due to a tax cut on house purchases and a jump in demand for larger homes outside city centres which are more suited to home-working.
RICS said the biggest constraint on construction was now a shortage of building materials, rather than the financing difficulties faced in previous quarters.
Productivity in the sector was down by about 5% due to social distancing requirements for workers, but this was a smaller impact than surveyors had expected when the new rules were introduced last year.
Official data for February still showed output was 4.3% lower than a year earlier. But other private-sector surveys have also pointed to fast growth more recently. IHS Markit’s Purchasing Managers’ Index for the construction sector showed the largest rise in output since 2014 in March.
(Reporting by David Milliken; Editing by William Schomberg)