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Construction market records overall improvement

However, this was largely boosted by the dramatic rise in activity seen by the private sector, with 17% more surveyors reporting workloads in commercial construction rose rather than fell.

The private housing sector also saw a welcome hike in activity, moving to a net balance of +8 (from -10). In contrast, however, public housing and public non-housing sectors continued to be the hardest hit, with net balances in both sectors remaining in negative territory.

The overall rise in workloads also masked stark regional differences, with work levels varying significantly across the UK. A North/South divide was apparent, with respondents in the South reporting increased activity and workloads seemingly dipping in the North. London and the South East reported the strongest figures, with a net balance of +24, whereas Northern Ireland recorded the largest falls in activity with a reading of -68.

Looking ahead, surveyors revealed that the market remains competitive but are positive about future job prospects, for the first time since Q1 2008, with 5% more respondents expecting employment levels to rise rather than fall over the next 12 months.

Surveyors were similarly upbeat with predictions for workloads, at a net balance at +18, the best reading in three years. Nevertheless, perhaps unsurprisingly, estimated profit margins remain negative, with 30% more expecting profits to fall rather than rise over the coming year.

RICS Chief Economist, Simon Rubinsohn said: "The stronger reading for construction output workloads in the first quarter of 2011 compared with the final three months of 2010 contrast directly with recent ONS data – strengthening the case for an investigation into the quality of the official statistics. We are particularly encouraged by the indications that the private sector is not only seeing an increase in workloads but planning to raise employment.

"With impending public spending cuts, the construction industry is still likely to face significant challenges over the next 12-18 months, but our latest results do provide a chink of light that things are beginning to get better."

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