Growth in the construction sector continued to slow in the second quarter of the year as uncertainty in the UK economy delayed investment, according to property professionals.
The Royal Institution of Chartered Surveyors’ survey for the three months to June 30 found that private commercial, industrial and housing sectors saw the most significant slowdown.
The survey, which was conducted after the result of the referendum was known, found that while workloads and the amount of employment in the sector continued to grow, the pace was slower than was previously anticipated.
According to RICS’ survey, 17pc of respondents reported a rise in activity over the previous three months, compared to 28pc in the first quarter. More than a quarter of contributors still reported a rise in private housing activity, although this was down from 36pc in the first quarter.
The survey found that, for the second successive quarter, the biggest constraint on output was finance, with more than two-third of contributors highlighting this as the principal challenge.
Credit: GARY DOAK / Alamy
More than a third of respondents said a lack of funding was restricting development, and 60pc said planning and regulatory delays constrained growth.
Despite a slowdown in activity in the period, skills shortages in the sector still remain an issue: more than half of the respondents to the survey said the lack of appropriately skilled labour, particularly bricklayers and quantity surveyors, was holding back building projects.
The more uncertain prospects for the economy have led to a less optimistic outlook for the sector over the year ahead, although 23pc of respondents still expected activity to rise rather than fall.
On average, those asked said they expected their workloads to increase by 1pc over the coming 12 months, down from the 2.8pc growth predicted in the first quarter.
Simon Rubinsohn, RICS’s chief economist, said: “Anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the EU could see some investment plans in the construction sector scaled back.”