Struggle goes on for building firms, says survey

MANY building firms struggled during the second quarter of 2012, despite the Government’s attempts to kick-start a recovery, according to the latest RICS Construction Market Survey.

Infrastructure workloads across Yorkshire and the Humber fell during the three months to June, and little improvement has been seen in the sector since 2007.

The survey recorded a net balance of - 11 per cent for infrastructure work, a sign that the economy is still in trouble.

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This low level of activity was reflected across the construction sector with 10 per cent more respondents reporting falls rather than rises in workloads.

However, it is the public sector where the pressure continues to be greatest.

Profit expectations in the region continue to deteriorate, with the net balance falling from -18 to -21 per cent, reflecting the continuing pressure on margins as input costs in Yorkshire rise more rapidly than output prices.

Surveyors noted that increasing competition is leading some companies to bid for work at below cost price in order to secure contracts.

Regional variations were evident across the UK, as the South, Wales and the Midlands saw overall workloads stabilise, while the North, Scotland and Northern Ireland suffered further falls.

Despite this, surveyors in Yorkshire and the Humber are optimistic, with a net balance of 21 per cent more surveyors predicting workloads to rise over the coming twelve months.

RICS spokesman Ian Tomlinson, of Rex Procter & Partners, said: “There are lots of construction plans for Yorkshire and the Humber but very few projects are materialising and getting started. This is particularly difficult and frustrating for our region’s SMEs (small and medium-sized enterprises).

“However, the industry has the potential to provide a lot of opportunities to young unskilled and semi-skilled people with some support.”

Simon Rubinsohn, RICS chief economist, added: “Infrastructure workloads failed to pick up despite the Government’s attempts to boost the sector through private investment.

“More action to back up the rhetoric is urgently needed if the construction industry is to play a meaningful role in driving the economy forward over the next few years.”