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News Release from: Euler Hermes UK | Subject: Construction Sector- On Solid Foundations?
Edited by the Buildingtalk Editorial
Team on 22 April 2008
Euler Hermes UK Construction Industry
Report
Despite increased demand in public and private sectors, rising material and pre-construction costs are putting pressure on UK Construction industry, according to new report from Euler Hermes UK.
The report, entitled Construction Sector- On Solid Foundations?, suggests that while at present the UK construction industry is in good health, looking forward it is not possible to ignore the wider concerns for the economy, with the deterioration in macroeconomic conditions in Europe and North America and difficulties in the financial sector already giving rise to growing uncertainty across the construction sector Under the broad banner of construction, nearly 200,000 companies employ over two million people and generate revenues of nearly GBP200 billion putting this industry at the heart of plcs in the UK
This article was originally published on Buildingtalk on 16 May 2006 at 8.00am (UK)
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According to the report, in 2006 the UK construction and house building industry had an estimated output value of about GBP113.6 billion, including public sector direct work.
This value reflected what is being built and is split approximately 33%/ 67% between public and private sector work, but future forecasts are faltering.
"Construction, even at the best of times, is a genuine maelstrom of competing forces and interests, but at present, it looks to be facing a storm of problems," says Hugo Lister, Senior Credit Analyst at Euler Hermes.
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"These range from rampant material and energy costs, a shortage of skilled labour, particularly at professional and management levels, a costly contracting bid process, and an imperative to redress environmental issues, notwithstanding general ongoing inflationary pressures competing against the need to boost economic confidence post 'credit crunch', which jointly are causing uncertainty on the direction of interest rates".
"Opinions on UK construction are currently divided".
"Strong order books should ensure a comfortable 2008, but counter to this is the surge of issues, which is already eroding confidence".
"Euler Hermes' experience of late has been an upsurge in smaller construction related failures".
"The devil here is likely to be in the government detail, since positive industry sentiment, which is reflective of 2008 work loads, is actually strongly grounded on large scale public investment continuing apace, with much of it headline projects, for example the 2012 Olympics".
"However, should the UK's fiscal position prove inadequate to the Government's commitments, this will likely disappear - and fast".
The report contains further details on the plethora of issues faced by the construction industry, alongside statistics and future predictions.
To request a copy, or for further press information please contact Iona McIntyre imcintyre@aga.co.uk.
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