By Joe Hoppe
A challenging macroeconomic environment increasingly hit the U.K. construction industry in the fourth quarter of 2022, according to the latest data from the Royal Institution of Chartered Surveyors.
Headline workloads--those workloads across all construction sectors--dropped to a net balance of minus 1% in the final three months of the year, from a positive net balance of 17% in the third quarter and 30% in the second quarter, according to the professional body.
The most significant drop was recorded in the private-housing sector, where workloads fell to minus 13% from positive 17% in the third quarter. Elsewhere, commercial and industrial workloads turned slightly negative, with a net balance of minus 2%.
In contrast, the infrastructure sector remains more upbeat, with a positive net balance of 22%, reflecting the longer-term nature of many projects, RICS says.
Respondents to the survey have continued to highlight shortages of both labor and materials, though in lesser numbers than before, while the proportion of those identifying financial constraints as a problem has risen for four consecutive quarters to reach 62%. This is the highest level since the third quarter of 2020.
Looking ahead to 2023, 35% of respondents believe credit conditions will get tougher. While this is still high, it is better than the 60% that expected harsher conditions in the third quarter.
"Significantly, the industry is continuing to grapple with the challenge around finding adequate supplies of skilled labor, both at a professional and trades level. Addressing this issue will be critical in enabling the sector to play a comprehensive role in supporting the economy as it emerges from the current downturn," said RICS Chief Economist Simon Rubinsohn.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
01-12-23 0144ET
