NEW YORK CITY – The Q2 2022 RICS Global Construction Monitor results suggest momentum is softening in many parts of the world as the more challenging macro environment starts to take its toll on activity. Overall, headline workloads continue to rise across all sectors at the global level.
Construction Activity Index moderates across the board. At the global level, the Construction Activity Index (CAI) eased over the latest survey period, posting a figure of +12 compared to+20 last time. Although, while the index is still in positive territory and therefore consistent with an overall expansion in activity, this does represent the softest reading since Q4 2020.
- Construction Activity Index stalls in Europe and APAC, but remains a little more resilient elsewhere
- An overwhelming majority of respondents still report material costs and shortages to be impediments
- Employment is still anticipated to rise across the construction industry in the year ahead
Materials costs pose a major obstacle. Aligned with the feedback received over much of the past year, the rising cost of materials is cited by 88% of contributors to be a major obstacle to construction activity. Similarly, around three-quarters of respondents report that outright material shortages are impeding the industry at present. On the back of the steep rise in input costs, profit margins reportedly narrowed during Q2.
Whether higher inflation becomes more firmly embedded in the expectations of both businesses and wage bargainers will be critical in judging the extent to which policymakers will need to continue raising interest rates and, inevitably, the impact on the prospects for the world economy.
About RICS
RICS designs to effect positive change in the built and natural environments. Through their respected global standards, leading professional growth, trusted data and insights, the company promotes and enforces the highest professional standards in the development and management of land, real estate, construction and infrastructure. Their work with others provides a foundation for confident markets, pioneers better places to live and work and is a force for positive social impact.www.rics.org
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