Rics: Credit crunch knocks construction sector confidence

24/01/2008

Confidence in the UK construction industry's profit outlook has fallen as a result of the current slump in the housing market, according to a new survey.

The latest Royal Institution of Chartered Surveyors (Rics) UK Construction Market Survey found that growth in the volume of construction contracts reduced in the fourth quarter of 2007 as the effects of the credit crunch began to make an impact on the sector.

Rics senior economist David Stubbs said: "A slowing housing and commercial property market, following the credit crunch and the Northern Rock turmoil have started to hit the construction sector.

"Current financial instability is rocking market sentiment and may see the industry enter a period of uncertainty. Doubts are likely to intensify over the ability of the government to meet its ambitious house building targets. Indeed, it is worth noting that new housing starts have already begun to stagnate in recent quarters."

The construction industry also continues to experience a skills shortage forcing employers to recruit workers from the EU.

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