Britain’s Construction Sector Records Sharpest Decline in Nearly Six Years

Britain’s Construction Sector Records Sharpest Decline in Nearly Six Years

UK: Britain’s construction sector recorded its steepest contraction in nearly six years during the three months to March, with the Royal Institution of Chartered Surveyors (RICS) reporting the industry’s net workloads balance falling to -12% from -6% in the previous quarter, marking the weakest reading since Q2 2020 when it dropped to -36% during COVID-19 lockdowns. According to the survey of 938 firms, rising material costs linked to the war in Iran, tighter credit conditions, and increasing margin pressure have led developers to slow construction activity, while profit margin expectations declined sharply to -27%, the weakest since Q4 2022. Construction costs are projected to rise by 6.6% over the next 12 months, with material costs expected to increase by 7.5%, while hiring expectations weakened to a net balance of +8 from +14 in the previous quarter. Infrastructure remained the only positive segment, although momentum has started to fade, and house-building expectations were reported as flat amid concerns over planning changes.

Source: Reuters