While the pace of complete new construction activity decreased from plus-21 per cent in the second quarter to plus-three per cent in quarter three, infrastructure was the sole sector to linger in the positive category (plus-13 per cent in quarter three from plus-39 per cent in quarter two) – with energy, ICT and social development displaying the biggest outputs.
Both private commercial (like office and retail projects) and residential experienced small falls in activity throughout the quarter, decreased by a net balance of minus-16 per cent and minus-13 per cent.
RICS chief economist Simon Rubinsohn stated that despite the fact that the growth in activity in the building sector moderated throughout the summer, it seemed to be because of temporary factors.
Rubinsohn goes on to say that predictions for workloads stay positive with infrastructure spend, in the wake of post-covid stimulus programmes mostly, remaining a main driver of the uplift in output throughout most of the area.
An ongoing issue is the challenge introduced by supply chain issues which have expressed themselves in problems in accessing chief building materials and escalating prices.
This is being compounded in some areas by added challenges in sourcing skilled work.
Therefore, the expected recovery in profitability of the sector is going to be longer than some may have hoped for, say respondents to the survey.
Over the next year respondents revealed happier expectations across the trio of primary sectors, with private residential, commercial and infrastructure works all anticipated to increase by double digit figures (net balances plus-12 per cent, plus-15 per cent and plus-50 per cent).
Like many areas of the globe, the most substantial factors suppressing the construction sector in APAC, says respondents, are still the high price of building materials (78 per cent), financial barriers (72 per cent) and lack of demand (68 per cent).
Also, the prices connected with construction, materials and skilled labour are supposed to go up by 6 per cent, 7 per cent and 6 per cent – showing that the cost of project delivery in the area is expected to increase.
Reflecting a difficult quarter for the sector, new project enquiries decreased in quarter three, down by a net balance of minus-10 per cent while profits are anticipated to stay flat at plus-one per cent throughout the next year.
With the COP-26 conference presently taking place in Glasgow UK, respondents expressed a reluctance among investors to adopt ecofriendly designs or carbon neutral building practices.
About 18 per cent said they’d witnessed no change in support and almost 41 per cent saying only niche investors had expressed an interest in sustainable building.
Twenty per cent of respondents said that biodiversity was not considered for any of the plans on their books while 39 per cent said that less than half of the projects accounted for it – creating a challenge that calls for a major game of catchup.
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