Gloom in local construction sector

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Construction workloads fell in all sectors towards the end of 2009, according to the latest RICS survey of the sector, amid signs that the impending general election is stalling new projects.

In the south west, 9% more chartered surveyors reported falling rather than rising workloads for the final quarter of 2009, compared to 12% nationally.

This figure is an increase from a net balance of 5% reporting falls within the region in Q3, and indicates that a recovery in the construction sector is potentially further out of reach, findings which would appear to be backed up with news this week that Truro building firm Darren Healey Building Contractors Ltd (DHBC) faces liquidation with debts of £800k and the loss of more than 80 jobs.

Public non-housing workloads declined for the first time nationally since Q1 2009, indicating that there has been a slow down in planned government capital spending projects. Here in the south west, there was a 22 percentage point fall from the previous quarter. Many respondents cited the general election, as well as the continued lack of development finance, as the main cause of inactivity.

Private housing and private industrial works both experienced further declines in workloads, with the net balance of chartered surveyors in the south west reporting falling rather than rising workloads declining to -18% and -27%. In contrast to this, infrastructure works increased slightly by 15 percentage points on the previous quarter.

Expectations for workloads, employment and profits for the next 12 months are all fairly downbeat.

Commenting, Andrew Covell, RICS South West spokesperson said: “The acceleration of capital spending programmes seems to have faltered in recent months and our members’ perception is that this is due to more caution being exhibited by the government in the approach to the general election.

“Coupled with the fact that development finance is still in very limited supply, this sector is likely to remain locked in recession for at least the first half of this year.”