Posted on 18/05/2017 by Lee Hiskett
New figures released have shown that activity in the construction industry in London has slowed giving rise once more to negative Brexit sentiment.
Deloitte's latest survey showed that the overall volume of office space under construction has dropped slightly but Nigel Shilton, managing partner of Deloitte Real Estate admits this to be more from the timing of many projects finishing following elevated levels of building for the previous 2 years than because of a slowdown from developers, he went on to say that 10 new schemes were being developed.
In addition to this the ICMS (International Construction Market Survey) is showing costs for London construction is set to rise by 4.1% this year due to a demand for infrastructure work and some skills shortages in the UK.
Despite the recent bounce back of sterling it was not enough to stop London from falling into 5th place from 3rd for being the most expensive city to build in. But it's not just London that is experiencing the pinch as the north of England is set to have the highest CPI (construction price inflation) outside London this year rising to 3.6% from 2.9% last year.
The Global MD for Turner and Townsend said "Now sterling has been devalued foreign investors have woken up to the possibility of opportunities in other areas of the UK with Manchester being highlighted as having the most potential as an option to London. This is shown by the huge increase in high rise schemes and residential construction" he went on to say “This year’s survey indicates a slowly warming construction industry suffering from increasing labour shortages in an improving global economy."
Half of the world’s construction markets, including London, are suffering from labour shortages, the report shows, only four cities included in the survey – Muscat, Perth, Santiago and Sao Paulo – reported a skills labour surplus.
The report also found that 8 per cent of the UK’s construction workers are EU nationals and that access to the European single market is critical to their continued employment.