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News Release from: PKF Accountants & Business Advisers | Subject: SME Construction Sector Growth Falters
Edited by the Buildingtalk Editorial
Team on 27 April 2004
SME Construction Sector Growth Falters
SME Construction Sector growth falters as input costs rise - according to the 'PKF SME Index', a quarterly survey of 800 SMEs operating in the manufacturing, construction and service sectors.
The record levels of activity and new business enjoyed by small and medium-sized businesses (SMEs) in the construction sector at the end of last year have dropped off whilst input costs have risen strongly, according to the 'PKF SME Index', a quarterly survey of 800 SMEs operating in the manufacturing, construction and service sectors Activity levels in the construction industry were still improving at 54.3 (where scores above 50 indicate an improvement on the previous quarter) despite being considerably down from 64.5 in Q4 2003
This article was originally published on Buildingtalk on 19 Jul 2007 at 8.00am (UK)
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Strongest rise in new business since Q4 2004 and employment growth is highest since Q4 2005.
Survey respondents cited the seasonal downturn and poor weather as reasons for the drop in activity.
New business levels also fell from 60.7 last quarter to 56.9 but, overall, these figures still mirror the overall buoyancy of the sector in recent years.
Levels of employment remained the same at 50.0 but this is a sharp drop from 57.2 in Q4.
However, the annual March industry price increases together with the rise in steel prices and other raw materials pushed input costs up substantially from 60.0 to 65.1, the highest costs inflation for two and a half years.
The main reason for the rising price of steel is China's burgeoning demand for raw materials to fuel its industrial output.
The members of PKF's Growing Business Forum also feel threatened by overseas competition.
Says John Holmes of Abbseal Limited in Leeds: "The relative demise of the markets on the European continent means that overseas competitors - including the Irish Republic - are increasing their interest in the UK construction industry." Stuart Barnsdall, partner specialising in growing businesses at PKF, commenting on the SME Index findings, said: "While the overall picture from the construction sector still looks good, increased input costs and unwelcome competition mean that it is a tough, challenging and competitive environment that is increasingly affected by large, rapidly growing economies such as China.
The demands of the global marketplace are now impacting severely on any business that relies on the supply of raw materials.".
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