A RICS report on the UK construction market says a weak private house building sector did not prevent steady growth in UK construction activity in the last quarter.
The report says that after a big leap in the previous quarter, growth in private house building was slower over the last three months with only 10% more chartered surveyors reporting a rise than a fall in workloads compared to 29% the previous quarter.
However this drop was expected after the hectic pace of expansion.
Overall, the industry is yet to feel the benefit of higher demand in the UK housing market.
Private sector strength is coming from significant gains in private industrial and commercial projects, an indication that businesses may be preparing to invest after the mild slowdown in economic growth in the past year.
Public project infrastructure building has rebounded strongly, however high material and energy prices are reducing profits.
Many industry professionals believe that higher business demands later in the year will offset these high material and energy prices.
RICS economist David Stubbs said: “Construction companies are still troubled by rising costs but the overall picture is of an industry that has staved off any marked slowdown and is well placed to grow in line with increased business demand later in the year.
“Public sector investment is set to grow rapidly and the industry should soon start to reflect the pick up in housing market activity.”
References: EGi News 12/01/06
