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UK Construction Insights – Infrastructure Development Gains, Private Housing slides

UK Construction Insights - Infrastructure Development Gains, Private Housing slides
The Royal Institution of Chartered Surveyors has released Q2 2023 construction insights revealing the landscape of UK construction. While the industry at large maintains a semblance of stability with moderate fluctuations, a closer inspection of its varied sectors exposes varied trends and patterns. RICS’ data reveals that infrastructure development grew, seeing a positive change of 17% in this quarter. On the other hand, the private housing sector is not doing well. It has seen a decrease of 12%. This means that there has been a decline in activities like constructing new private homes or residential buildings.

Despite Difficulties, Infrastructure Development Predicted to Grow

We know that the construction industry globally is facing material and labor shortage difficulties, financial constraints, and complex regulations, all of which are collectively affecting construction output. The RICS report states that in the past quarter, the state of credit conditions within the industry deteriorated to -42%, suggesting that obtaining credit or loans for construction projects became more difficult. A significant 64% of respondents identified financial constraints as the most significant obstacle they face. Furthermore, labor shortage remains an issue. Over 50% of respondents faced difficulties when trying to hire quantity surveyors. Notably, several respondents have expressed their intention to combat the labor shortage by increasing their investment in training programs Despite grappling with an array of obstacles, from financial constraints that tighten the purse strings of investment to a persistent shortage of skilled labor, the trajectory of this critical sector seems poised for upward momentum. Infrastructure development remains a frontrunner, with respondents projecting a steady rise in activity over the next 12 months. Expectations for commercial workloads also continue to hold a positive stance. As for private residential endeavors, the outlook bears a more subdued tone. It is predicted that residential workloads will be flat over the next 12 months. RICS Chief Economist, Simon Rubinsohn talked about the financial constraints and outlook. He says “Feedback to the Q2 survey shows the rising trend in base rates is leading to increased financial pressures in the construction industry. This is not anticipated to lessen any time soon and is also reflected in the cautious assessment regarding the outlook for profitability. However, there are some signs of an easing in the extent of skill shortages which is accompanying the flatter trend in activity. Infrastructure numbers remain solid, but the survey provides further evidence of the challenges in delivering residential developments at the current time.”

Need To Invest in Training for Workforce

The report goes on to state that to meet the demands of constructing more housing units and infrastructure, it’s crucial to invest in developing a workforce that is well-equipped with a diverse skill set. This includes training individuals in traditional construction techniques as well as equipping them with the knowledge and expertise to work with advanced digital tools and environmentally friendly practices. “Realistically, to deliver on housing targets, investment is needed to build up a diverse future pipeline of construction skills, in particular, to embrace digital and green technologies,” says RICS Head of Professional Practice – Construction, Amit Patel. He then states recruiting overseas workers can be a short-term solution to address the labor shortage. He says “In the short term, however, there should be more flexibility for international recruitment. We advised the Migrant Advisory Committee (MAC) in their recent review of the Shortage Occupation List (SOL) that the built environment professions including quantity surveying should be on the list of ‘skilled’ occupations that have been assessed to be in shortage in the UK which could be addressed through the recruitment of overseas workers.” By combining cutting-edge digital technologies and eco-conscious practices, we pave the way for a skilled future workforce that can contribute to a sustainable and innovative construction landscape. Follow Indovance Inc for AEC Industry Updates and Global Construction News.

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Indovance Inc. is a global CAD technology partner serving the needs of the AEC industry since 2003. We focus on the unique needs of each project or client, addressing real challenges and guaranteeing a well-coordinated, smooth, efficient, and hassle-free process. Collaborating with customers worldwide, we harness our enormous engineering talent pool and state-of-the-art technology to develop bespoke business solutions. By aligning with your culture and processes, we create an unbreakable partnership to deliver long-term engineering and business strategies. With over 700 full-time employees and more than 500 customers in the US, Europe, Canada, and Australia, we are poised for the next level of success. Indovance Inc. acts as a catalyst, Empowering You for positive change and supporting you to Do More. For more queries regarding any of the topics mentioned above, feel free to connect with us on our website www.indovance.com, or contact us at +1-919-238-4044.
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