RICS Sees Infrastructure Focus Driving Americas Construction Uptick

RICS’ global Q1 2021 Construction Monitor shows that activity is continuing to pick up gradually for the Americas. Both Canada and the U.S. are showing strong performances and infrastructure projections picking up sharply in the U.S., in common with the Asia Pacific region, where infrastructure has been a focus for some time.

Looking at industry sentiment around current workloads, the strongest momentum is in the private residential sector, consistent with data that indicate new housing development close to a 15-year high, RICS says. However, although development in this part of the construction sector is viewed as accelerating over the course of 2021, an even bigger uptick is projected for infrastructure, reflecting the ambitious plans proposed by the Biden administration. 

“Predictably, the infrastructure workloads are reported as currently growing most strongly in the digital and energy segments,” according to RICS. 

Across the Americas, the cost of materials is constraining activity, which continues to be a global problem. Additionally, a shortage of appropriately skilled labor is adding additional hurdles to the recovery. In both the US and Canada, the problem is especially pronounced when it comes to skilled trades, while a shortage of quantity surveyors is another factor.

“Unsurprisingly, respondents in the Americas cite the cost of materials as a constraint on activity at the present time; this is a theme that we have picked up across the globe,” according to RICS. 

That being said, there’s evidence that construction firms are learning to work more productively under current pandemic-related restraints. The estimated average loss to productivity is estimated at less than 8% in both Canada and the U.S., compared with more than 10% last year.

Anil Sawhney, director of the infrastructure sector at RICS, said, “Based on the survey conducted by RICS, one thing is vitally clear: infrastructure is key to the future. There are great expectations from the infrastructure sector as the U.S. and Canada plan their recovery and stimulus packages. 

Sawhney continued, “Negative pressures of soaring steel and lumber prices and political headwinds are also evident. While we discuss infrastructure and the future of the built environment, we must not forget the substantial threat that climate change poses to our communities. As we build to a better tomorrow, quality infrastructure must strive to innovate and create equity in our society.”

A couple of comments included in the survey from U.S. respondents illustrate the wide range of local market conditions. “The public works market has been flat as local and state revenue has taken a hit,” observed a Los Angeles respondent. Conversely, in New York a respondent reported, “We see uptake in build work progress & regulatory body approval as vaccination rolls out.”