UK Construction Industry Trends
It’s fairly safe to say that times have been tough for the UK construction industry over the past couple of years. The sector was hit hard by the recent recession and signs suggest that it’s struggling to pick up despite the return to economic growth. The fact that growth remains sluggish is one problem as it means there’s less demand in much of the country, and there are also other challenges, such as lack of access to capital to finance projects as banks impose strict conditions.
We can tell a lot about the current state of the UK construction industry by looking at confidence levels. Currently these are quite low: firms reported a fairly positive outlook at the start of 2010. By the end of the year, however, this had fallen significantly and there’s little sign of change in 2011. The housing market is playing a large part in this as fewer houses are being sold and built, which is then affecting the rest of the industry.
In comparison to the twelve months that have just gone, a survey of UK construction firms found that less than 50% of them were more optimistic about the year to come. Also, the fact that around 30% of firms are actually less confident about the next twelve months shows signs that the industry is still shaky and that firms are worried about their prospects. Some firms, especially in the London area, are however reporting good profits – proof that it’s not all bad.
It seems as though things could continue in this way for some time yet. In London, the UK industry appears to be picking up admirably but unfortunately most of the benefits from this aren’t being felt outside of the capital. Some economists have even suggested that the sluggish construction industry outside London could force the country back into recession, despite the fact that things are picking up in the south. It also suggests that any sustained growth is likely to come from the south.
In conclusion, it seems safe to argue that over the coming months and years, the UK construction industry will continue to face challenges. Businesses will continue to be afflicted by sluggish growth in much of the country, although buoyant growth in London construction might stop too many bad things from happening. The housing market will continue to pose problems as fewer houses are being built, but there’s no reason for too much gloom just yet as there is still every chance the industry could bounce back to health.
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