Recovery of construction worldwide is slowing amid challenges, according to the Royal Institution of Chartered Surveyors Global Construction Monitor. Its latest activity index, which measures current and expected workloads for global respondents in residential, non-residential and infrastructure sectors, as well as company profit margins, reached +18 in the third quarter of 2021, falling from +25 in the second quarter.
The index for the U.S. stands at +34, down from last quarter’s +45, while Canada registered at +46, up from the previous reading of +39, said the RICS survey. The European index reached +34, showing no change from quarter two, while Asia Pacific came in at +3, a sharp fall from +21 in the second quarter. The index in the Middle East and Africa stand at +18, up from last quarter’s +8.
“A strong theme in the responses is the challenge presented by the rising cost of materials and securing the skilled labor for the industry to thrive,” says Simon Rubinsohn, RICS chief economist.
Of those surveyed, 83% reported concerns over rising material costs, the same percentage recorded last quarter. Material shortages also remain a challenge, according to 66% of respondents.
“Significantly, contributors to the survey continue to project a faster rate of growth in construction costs than tender prices—highlighting the difficulty in rebuilding profitability at an aggregate level,” Rubinsohn adds.