Construction able to grow in line with demand

A year of remarkable stability for the construction sector is how the latest RICS public affairs bulletin sums up 2005.

A year of remarkable stability for the construction sector is how the latest RICS public affairs bulletin sums up 2005.

A weak private housing sector has not prevented construction activity in the United Kingdom from growing steadily, it says.

After a 29 per cent jump in reports from members of rising private house-building activity in the third quarter, the figure was down to 10 per cent in the final quarter of the year, a deceleration expected after this hectic pace of expansion.

But overall, says the report, the industry is yet to feel the benefit of higher demand in the UK housing market.

The private sector is, however, lending strength in the form of significant gains in private industrial and commercial projects, indicating that the mild slowdown in economic growth of the past year has come to an end and business may be preparing to invest.

Public projects continue to be a fertile source of work, according to this source, with levels of infrastructure work rebounding strongly.

"However, profit expectations are currently being dampened by high material and energy prices.

Nevertheless, many industry professionals believe high prices will be more than offset by higher business demand later in the year and profits are expected to rise accordingly." RICS economist David Stubbs commented: "Construction companies are still troubled by rising costs but the overall picture is one of an industry that has staved off any marked slowdown and is well-placed to grow in line with increased business demand later in the year.

"Public sector investment is set to grow rapidly and the industry should soon start to reflect the pick up in housing market activity.".

Back to top