Uncertainty has caused delayed investment in the UK economy, causing construction sector growth to slow in the second quarter.
The recent survey discovered that a wide range of sectors experienced significant slowdown, including industrial, commercial and housing.
The PMI (purchasing managers’ index), used to indicate the confidence of the construction and manufacturing sector has dropped at the quickest pace since a year after the 2008 crisis.
After the recent vote to leave the European Union in June, the survey was commissioned to see the effect of the referendum. It found that although the industry was seeing a rise in both workloads and employment, the pace observed was lower than expected.
17 per cent of those surveyed reported a growth in activity in the previous three months. This is compared to 28 per cent from January to March. Over 25 per cent of respondents still reported an increase in private housing; however this was an 11 per cent drop from the first quarter.
The survey found that the largest restraint on output was finance during the first half of the year. More than two thirds of respondents expressed this as the top challenge. 60 per cent said that rules such as planning and regulatory issues were holding back the growth rate.
More than half of the total of those who replied to the survey stated that bricklayers, quantity surveyors and other such skilled labourers are lacking in the construction sector, which has led to constraints on projects.
The general consensus was that most people on average expected their workload to increase by 1 per cent in the next year, a lower prediction than the previous quarter. The UK’s economic future is uncertain, leading to a less optimistic outlook for the next 12 months. Nevertheless, nearly a quarter of respondents (23 per cent) said they predicted activity to grow as opposed to decline.
The chief economist for the Royal Institution of Chartered Surveyors has suggested that the difficulty in forming a post Brexit relationship between the EU and the UK may lead to investment being cut back in the construction sector.