Construction sector confidence began to ebb away in the second quarter of 2011 as fears about public expenditure cuts and the health of the economy took root, according to the latest Royal Institution of Chartered Surveyors construction market survey.
The improvement in the first quarter was not sustained and 7% more surveyors reported a fall in total construction workloads compared to 5% more reporting a rise at the beginning of the year.
Most sectors reported a drop in workloads, apart from private commercial and residential, which showed no change.
Public housing and public works were the worst hit, turning from 3% to -26% and from 0% to -33% respectively, in part thanks to the end of the Building Schools for the Future programme.
Falling workloads were reported in all UK regions apart from the South East and London, where things were stable, but Northern Ireland saw 75% more surveyors reporting falls than rises, compared to 59% in the first quarter.
Problems recruiting workers were down from 3% of respondents to 1%, and 16% more surveyors expected employment to fall than to rise, compared with -5% in the first quarter.
"This survey suggests that it is too early to conclude that the construction industry is on the road to recovery despite the strong contribution the sector appeared to make to the latest GDP data," said RICS chief economist Simon Rubinsohn.
"Significantly, spending cuts are already having an adverse effect on sentiment and although the cost of tradesmen and overheads continue to fall, raw material prices are rising - creating a difficult operating atmosphere. Surveyors are also reporting an increase in competition for work as larger firms bid for smaller projects. Meanwhile, a continued lack of clarity from the government on existing projects is adding to the uncertainty. Given all these factors, it's little wonder respondents to the survey are feeling gloomy."
