Partner Article

Construction sector runs out of steam in the North East??

A SURVEY has revealed that 59 percent of Chartered surveyors in the region have reported there has been no movement in construction workloads in the third quarter of 2010.

According to the latest RICS Construction Market survey, the impact of government spending cuts and continued concerns over access to finance saw the outlook in the North East construction industry turn increasingly bleak during this period.

Of those who did see an adjustment, it was downwards, with six per cent more surveyors in the North East reporting that workloads fell rather than increased.

Michael Henning, RICS North East construction spokesperson and an associate director at Newcastle-based Summers-Inman said: “The national survey results reflect the situation in the North East.

“The reduced workload in the majority of sectors has produced a very tough and highly competitive construction market and a hard year ahead is anticipated.

Demand for manual labour in the region remains subdued, with just seven per cent of surveyors reporting difficulties in recruiting workers.

Looking forward over the next 12 months the overall outlook is one of doom and gloom for the North East, with a net balance of -6 per cent of surveyors expecting workloads to decrease.

Meanwhile, 29 per cent more surveyors continue to expect profits to fall further rather than rise over the next twelve months.

Walter Jonas FRICS, Baker Mallet LLP, North East, added:“Tendering opportunities for contractors are well below traditional levels.

“As a consequence of this, current tenders are coming in well below budget estimates with some down to net cost in order to win work. Sub-contractors are now having to offer bigger discounts to maintain labour levels and workload.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .