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Surveyors lack faith in government schemes 09 February 2012

Chartered surveyors are pessimistic about future prospects and see little prospect of government initiatives doing anything to arrest the decline in their workload.

The Royal Institution of Chartered Surveyors’ construction market survey for Q4 2011 showed the net balance for total workloads declining from -1 to -7. Private commercial building remains the only area not recording falling workloads, with a net balance of +2.

The public sector continued to record the most severe falls in workloads, with the net balances of public housing and other public works at -17 and -22 respectively.

RICS said that the outlook for the industry “remains downcast” and workload was projected to be broadly flat over the next 12 months. Further falls in employment and profit margins are expected.

Project funding was getting no easier to source, with 58% of chartered surveyors saying that there had been no change in the prevailing tight lending conditions and 39% reporting declining levels of development finance.

Survey respondents were sceptical about the likely benefit of government initiatives.

Only 27% expect any positive impact from the government’s £420m ‘get Britain building fund’. The government expects this fund, over the next two years, to unlock 16,000 homes on sites that are currently stalled for lack of finance and create 30,000 jobs. Surveyors do not seem impressed.

The RICS survey also asked how successful the government will be in increasing institutional funding necessary to deliver the infrastructure envisaged in the autumn statement (£30bn targeted, with £20bn expected from the private sector). The majority of respondents (57%) said the government would fail to meet its targets and only 11% thought they would achieve the required level of institutional funding.

Survey responses also suggested that SMEs are being further squeezed out of the market against the backdrop of falling workloads and tighter profit margins. Only 12% of respondents envisage any help to SMEs from government initiatives.

The Construction Index

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