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HONG KONG, Feb. 18, 2015 /PRNewswire/ -- Total construction workloads in Hong Kong edged up over the last three months of 2014, according to the Q4 2014 RICS Hong Kong Construction Market Monitor published by the Royal Institution of Chartered Surveyors. All three RICS' forward looking indicators regarding workloads, employment and profit margins, also suggest that respondents are still optimistic about the coming year.
The Monitor shows that 12% more respondents from construction sector reported rising workloads in the last quarter of the year, driven by both the private housing and infrastructure sectors.
Respondents, on average, expect workloads and employment levels to rise by 2.5% and 1% respectively. A net balance of 67% of respondents also expect profit margins to rise by around 2% for the coming year.
Skill shortages are still widespread across both white and blue collar workers. The scarcity of electricians and plumbers was particularly pronounced in Q4 with all respondents having some difficulty sourcing labour in these fields.
RICS Senior Economist Andy Wu, said: "While the construction industry is showing some signs of life, we believe the greatest challenge facing the sector this year is uncertainty. Residential construction continues to experience growth in the city. That said, we can't rule out the possibility that short-term fluctuations in residential housing prices will occur sometime this year and hence slow down output. Furthermore, activity in the non-residential construction sector has been losing steam, as commercial construction continues to be hit by softening demand and lower levels of consumer and business confidence. We believe growth in this sector looks unlikely to pick up until the arrival of a more sustainable economic recovery.
Interestingly enough, increases in residential construction and some government-led infrastructure projects have positive effects on the construction workforce and therefore, labour demand will likely continue to outpace supply for some time to come. As the construction industry pushes forward, a lack of skilled labor could start to put a brake on new construction projects and cause further upward pressure on construction costs. More critically, there is a longer-term risk of a shortage in skilled workers. Undoubtedly, it will be negatively impacting the growth potential of this sector."
The Global Construction Market Monitor data is a good lead indicator of hard data. This has been the case in many key markets in which RICS has been able to explore the relationship between the RICS time series and other sources of data.
About the Survey: The RICS Hong Kong Construction Market Monitor is a quarterly sentiment survey of respondents who operate in the construction sector.
About RICS
Confidence through Professional Standards
RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards -- bringing confidence to the markets we serve.
We accredit 118,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation, real estate management; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply.
We believe that standards underpin effective markets. With up to seventy per cent of the world's wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe.
With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.
We are proud of our reputation and work hard to protect it, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive.
About RICS Asia
RICS Asia supports a network of over 20,000 individual professionals across the Asia region with an objective to help develop the land, property and construction markets in these countries, by introducing professional standards, best practice education and training. We promote RICS and our members as the natural advisors on all property matters. We also ensure that services and career development opportunities are provided to members.
RICS Asia region serves local member associations locating in Brunei, Japan, Malaysia, Singapore, Thailand, The People's Republic of China, Hong Kong SAR, Taiwan and South Korea. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Kiribati, Laos PDR, Macao SAR, Mongolia, Nepal, North Korea, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.ricsasia.org.
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