We recently spoke about the strong threat of data breach fines facing the construction sector with the introduction of General Data Protection Regulation (GDPR) just on the horizon. And now, there’s more bad news as the Construction Products Association (CPA) has made a downward revision of the expected growth of the industry in 2018; expecting it to flatline.
Previously, the CPA predicted a 1.2% increase in growth for 2018. However, this was revised down to 0.7% before the forecasters finally settled on a prediction of 0% growth.
Some of the issues facing the construction sector and the reasons for this stagnation include subdued economic growth, rising inflation and falling real wages.
Also contributing to the downgrade was the dire prospects for office construction which is expected to see a 15% decrease in activity next year.
Whilst infrastructure work and private housing are expected to grow 6.4% and 2% respectively, this is still a slowing of growth compared to this year.
Because the construction industry is becoming increasingly reliant on major Government infrastructure projects such as HS2, if these do not come to fruition there could even be a decline of 1% to the overall industry in 2018.
Despite the recent figures from the CPA, a survey conducted with more than 100 finance chiefs from FTSE 350 firms has revealed that people are feeling optimistic about the industry. More than 27% said they were more positive about future prospects which shows a 9% increase, whilst those who felt less optimistic dropped from 42% to 27%.
Clarke Bell’s senior partner, John Bell, commented:
“The construction sector is facing a number of issues at the moment, which are causing financial problems for a lot of companies. The sense of uncertainty due to issues like Brexit, interest rate increases and inflation means investments and projects are being delayed – which is bad news for many.”
Clarke Bell help a lot of company owners within the construction industry who are struggling with cashflow difficulties. Many limited companies choose to enter a Creditors’ Voluntary Liquidation (CVL) which allows them to deal with any business debts in a legal way and close their company down.
A CVL is the best option for many, but it is not necessarily right for everyone.
To help you decide what the best option is for you and your company, you can have free advice from one of our experts.
For more information, contact Clarke Bell on 0161 907 4044 or [email protected]