New research shows construction work began to decline again in the West Midlands in the last quarter.
Researchers for the latest RICS Construction Market Survey shows the scale of public spending cuts and ongoing uncertainty about prospects for the economy hit the construction industry within the region.
Despite some encouraging signs at the beginning of the year, the latest data shows two per cent more surveyors reporting a fall rather than a rise in total construction workloads in the West Midlands.
The compares to a 10 per cent rise reported by surveyors in the previous quarter.
Most sectors of the construction industry have shown signs of a drop in workloads, although private residential was unchanged within the region.
Perhaps unsurprisingly, in light of cuts to budgets, public housing and other public works were the worst affected sectors, with the net balances sliding from 11 to -26 and 28 to -15 respectively in the West Midlands, and 3 to -26 and 0 to -33 nationally.
The large fall in the public works sector has been attributed to the suspension of the Building Schools for the Future programme (BSF).
Adrian Aston, RICS West Midlands spokesman and director at Wakemans, said: This survey suggests that it is too early to conclude that the construction industry is on the road to recovery despite the strong contribution the sector appeared to make to the latest GDP data.
Significantly, spending cuts are already having an adverse effect on sentiment and although the cost of tradesmen and overheads continue to fall, raw material prices are rising creating a difficult operating atmosphere.
Surveyors are also reporting an increase in competition for work as larger firms bid for smaller projects. Meanwhile, a continued lack of clarity from the government on existing projects is adding to the uncertainty. Given all these factors, its of little wonder respondents to the survey are feeling gloomy.