The construction market in the East Midlands and Lincolnshire is still growing despite Brexit tremors, according to the RICS UK Construction Market Survey for Q3 2016 — and echoed by some of the county’s leading firms in the industry.
Whilst the majority of UK construction sectors are experiencing a slowdown in growth, as Brexit uncertainty continues to cause concern, the East Midlands continues to surpass the majority of the UK regions in all areas apart from public housing.
This quarter, 30% more chartered surveyors reported that construction workloads across the region had risen rather than fallen. Whilst the East Midlands recorded the strongest reading across the UK this is a significant slowdown on the trend growth that the region has experienced in the last three years.
Private housing continues to be the key driver of construction growth across the region with 43% more chartered surveyors reporting a rise in workloads this quarter.
Growth in the region’s private commercial and infrastructure sectors also surpasses that of other UK regions/countries with 24% and 30% more surveyors reporting workload increases rather than decreases in these areas respectively.
A lack of skilled professionals still remains a big factor across the region this quarter with two thirds of respondents citing the need for more quantity surveyors and other construction professionals to complete projects.
Just like Q2, financial constraints remain the most significant impediment to growth, anecdotally linked to uncertainty, with 64% of contributors reporting such constraints to be holding back growth. Planning and regulatory delays are also impacting on activity in the region with 59% of respondents citing problems in this area.
Growth in output prices rose at a more moderate pace this quarter with a net balance of 25% of East Midlands chartered surveyors seeing a rise rather than a fall. Input costs continued to increase too this quarter with a net balance of 44% of respondents reporting a rise.
The outlook for the year ahead has improved following the initial shock of the vote to leave the EU with 52% more contributors expecting their workloads to rise rather than fall over the coming 12 months, up from 31% in Q2. Employment expectations have also improved in Q3 with 40% more respondents expecting a rise rather than a fall over the year to come.
‘Brexit has created a lot of jitters’
Mark Noonan, Customer Development Director at Simons Group, said: “I certainly share the RICS view that we are definitely seeing an increase in activity across our provincial customers, but there has been a tangible upturn within the Midlands Engine area across all our key activity in retail, logistics, health and universities.
“Lincolnshire is punching above its weight with investment partly, I think, because of a real unified focus through the Greater Lincolnshire LEP, and the county and city councils.
“We share the RICS concerns about skills — it is noticeably more difficult to recruit the right people and this will definitely affect the housebuilding challenges from central Government, especially in light of concerns post the EU referendum.”
Steve Gelder, Chief Executive at Gelder Group, said: “This report is very welcome, despite the Gelder Group enjoying its best year ever, Brexit has created a lot of jitters within the market and we are not immune to them.
“Prior to, and immediately following the Brexit vote, similar to the 2015 general election, enquiries dropped sharply but for the past few weeks we’ve been inundated with opportunities and there does seem to be a certain amount of confidence returning so I’d go along with what the RICS are reporting.”