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News Release from: PricewaterhouseCoopers | Subject: Global CEO Survey
Edited by the Buildingtalk Editorial
Team on 14 May 2007
Construction industry optimistic about
growth
Construction industry CEOS more optimistic about growth than other industries according to the PricewaterhouseCoopers Global CEO Survey.
Six out of ten engineering and construction (EandC) CEOs are very confident about revenue growth over the next 12 months, according to the PricewaterhouseCoopers 10th Annual Global CEO Survey Over 50 CEOs in the EandC sector were interviewed for the survey, launched today, which addresses the key opportunities and challenges that CEOs are facing in their efforts to position their companies in a global marketplace
This article was originally published on Buildingtalk on 15 Mar 2007 at 8.00am (UK)
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Over the longer term, confidence levels of EandC CEOs are undimmed, with nine out of ten optimistic about revenue growth over the next three years.
Only six per cent are not confident.
Fifty-six per cent were more confident about growth than they were 12 months ago.
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Interestingly EandC CEOs were more optimistic that those in other industries such as manufacturing.
Jonathan Hook, global engineering and construction leader, PricewaterhouseCoopers, commented: "It is not surprising that levels of confidence at board level are high given that the industry is currently in a global construction boom".
"Construction activity has outstripped GDP growth over the past three years, driven particularly by the catch-up on under investment in infrastructure and housing at the start of the millennium".
EandC CEOs view geographic expansion as the main opportunity to generate growth in their business.
Internally generated cash flow will finance most of the projected growth, according to 81% of respondents.
The debt and equity markets will provide a source of funding but only 12% of CEOs anticipate that private equity and venture capital will fuel growth.
Almost 80% of engineering and construction respondents said that they had engaged in cross-border MandA to gain access to new markets and customers.
According to the survey the most popular MandA hot spots for EandC companies have been Western and Eastern Europe.
Going forward, an overwhelming proportion of CEOs expect to find growth opportunities in Central and Eastern Europe and the Middle East.
CEOs highlight conflicting regulatory requirements, cultural issues/conflicts and unexpected costs as obstacles.
Despite confidence levels, several challenges are on the minds of EandC CEOs.
More than seven in ten expressed concerns about low cost competition, energy prices and commodity prices.
Only 35% admitted concerns over global warming and climate change but an even smaller proportion of CEOs (21%) have expended resources on preparing for global warming and climate change.
Availability of skills was ranked as their number one challenge - more than eight in ten raised this as a key concern.
Jonathan Hook, global engineering and construction leader, PricewaterhouseCoopers, concluded: "The worries over skills shortages are well founded".
"Resourcing the increasing number of opportunities rather than securing work is the biggest challenge now".
"This, coupled with building materials inflation averaging around six per cent per annum, suggests that it has never been more important to price projects effectively and capitalise on the strong market that exists".
"There are lots of opportunities to expand internationally, but the industry is right to proceed with caution.".
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