RICS: Surveys Reveal Contraction in Workloads and Drop in Tender Prices in UK in Stark Contrast to Hong Kong's More Promising Market Condition According to the latest RICS UK Construction Market Survey (Q4 2009) and BCIS UK Tender Price Index (Q3 2009)
HONG KONG, Feb. 12 /PRNewswire-Asia/ -- The Q4 RICS Construction Market Survey showed more surveyors seeing a decline rather than an increase in total workloads in UK. Indeed, the net balance fell to -12% in the final three months of the year from -6% in Q3. For the first time since Q1 2009, all of the sectors covered in the Construction Market Survey recorded a decline in workloads with results varying by sectors and regions, with the public sector faring relatively better than the private sector.
Private housing, private industrial and infrastructure all experienced further declines in workloads, with the net balance of chartered surveyors reporting falling rather than rising workloads declining to -17 percent, -19 percent and - 11 percent respectively.
Tender prices also fell for the seventh consecutive quarter in Q3 2009 but costs stabilised, slightly easing the pressure for construction firms, says the latest UK Tender Price Index compiled by BCIS, the Building Cost Information Service of RICS, published on 29 January 2010.
The price of new construction tenders fell a further 0.9 percent in the third quarter 2009, and now stands 12.2 percent down on the same time in 2008. BCIS predicts they have a further 4 percent to fall through 2010 before returning to growth in 2011.
In terms of activity, both reports indicate the UK market is still quite weak which is helping to drive down both construction workloads and tender prices. RICS Construction Market Survey shows the 12 month outlook with pessimistic forecast. Although workloads in UK are expected to increase, it will be in a slower pace than in estimated Q3. Employment and profit margins are still expected to contract.
Joe Martin, Executive Director of BCIS comments: "The drop in costs is due to falling material prices and a pay freeze for many construction workers. However falling costs will only bring limited relief as tender prices are expected to continue to fall through to the end of 2010 whilst demand remains weak. "
Commenting on situation in Hong Kong, Kenneth Kwan, Chairman of RICS Hong Kong Quantity Surveying and Construction Professional Group Committee said: "Tender prices in Hong Kong stabilised in the third quarter of 2009 and have since then been rising moderately contributed by the improved local economy and the prospects of large infrastructure projects coming onto the market. The outlook for the construction industry is much better than this time last year, and tender prices are expected to continue to rise throughout this year"
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About RICS & RICS Asia
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 122 countries.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.
The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: http://www.ricsasia.org .
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SOURCE Royal Institution of Chartered Surveyors