Construction workloads in Wales fell in Q4 2023 according to the results of the latest Royal Institution of Charted Surveyors (RICS) Construction Monitor. This is the first time that respondents in Wales have, on balance, reported a fall in construction workloads since the beginning of 2021.
A net balance of -16% of Welsh respondents reported that construction workloads fell through Q4 2023, down from +13% the quarter previous.
All subsectors saw workloads falling but it was a downturn in public works that took the overall workload balance from positive in Q3 to negative in Q4. A net balance of -13% saw a fall in public housing workloads (compared to +40% previously), -15% in other public works (compared to +6% (previously), and -29% in infrastructure (down from -4%).
This appears to be weighing on surveyors’ outlook as respondents in Wales anticipate that workloads will fall through 2024. A net balance of -9% of Welsh surveyors expect workloads to fall over the next 12 months. This is down from a net balance of +7% in Q3, and +14% in Q2.
Surveyors are also more pessimistic regarding the 12-month outlook for profit margins. A net balance of -25% of respondents in Wales anticipate that profit margins will fall through 2024. This is lower than the UK average which sits at -8% and, in fact, it is the lowest out of all the UK regions.
Welsh surveyors continue to report shortages in skilled workers as well, however, these appear to be easing across a range of disciplines. When looking at bricklayers, 53% of Welsh respondents reported a shortage, which is down from 65% the quarter previous. The figure is now 26% for civil engineers compared to 47% previously. Regarding building surveyors, 31% reported a shortage this time, compared to 45% in Q3.
Jon Simcock a chartered surveyor respondent based in Cardiff commented:
“Reduced public sector funding is leading to schemes being kept on hold indefinitely.”
Mark David Crowley of Blue Boar Project & Building Consultancy in Cardiff added:
“The impacts of COVID, global issues regarding the supply of materials and labour are key challenges. Inflation and elections in the UK and the US could also impact the market in 2024.”
