Construction activity across the UK continued to slow in Q3 amid economic uncertainty and regulatory challenges, according to new data from RICS.

RICS’s latest UK Construction Monitor reveals the headline construction workload indicator fell to -8% in Q3, signalling a broader cooling in activity following a period of stability earlier in the year.

The monitor also reveals new project workloads declined to -13% in Q3, compared with -5% during the previous quarter.

Repair and maintenance activity was “broadly stable” at +2%. However, this represents a noticeable easing compared with recent quarters.

Infrastructure remained the only segment “in positive territory”, standing at +8%, but this was slightly down from Q2’s +11%. The energy sector reported the strongest performance at +29%, followed by water and sewage at +18%.

RICS said its 12-month expectations had cooled, as economic challenges and geopolitical headwinds “continue to weigh on sentiment”.

Expectations for profit margins has fallen to -19%, as a result of cost pressures, competitive tendering and prolonged regulatory processes.

Last month, the S&P Global UK Construction Purchasing Managers’ Index (PMI) reported a construction activity reading of 46.2 in September, up from 45.5 in August. However, it added this was still below the neutral 50.0 value for the ninth consecutive month and signalled “a solid rate of contraction”.

Respondents to the RICS survey said they expected modest improvement over the next 12 months, with infrastructure leading growth expectations at +24%, but this is also down from +34% in Q2.

Respondents cited severe planning delays and capacity shortages within planning authorities as key barriers to construction growth.

Other challenges highlighted by respondents included Building Safety Act compliance delays, skills shortages – especially in specialist trades – and pressure from sustainability and regulatory demands.

Simon Rubinsohn, chief economist at RICS, said current activity levels remained “broadly flat with only a modest uplift anticipated over the course next 12 months”.

“As in the previous survey, it is in the infrastructure sector where workloads are viewed as likely to see the strongest gain, with the residential trend remaining more subdued,” he added.

“Challenges around the current planning regime continue to be cited by respondents to the survey alongside financials, but a lack of demand is also being raised more frequently. Despite this, the skills issue remains pertinent, with a shortage of quantity surveyors continuing to be highlighted.”

Last month, government data revealed nearly 4,000 construction companies in England and Wales entered insolvency in the 12 months to August, with construction remaining the worst hit of the sectors.