Press Releases
30 September 2009
Construction industry – the winners and losers review by accountancy firm Wilkins Kennedy
Banking, retail and construction led the UK economy into the recession. Whilst activity in most part of the financial services industry has picked up how is the construction industry doing?
According to Nick Parrett, Head of Property & Construction Group at accountancy firm Wilkins Kennedy, the fortune of most construction companies is still tied to how much public sector work they can win and hold onto.
New work in the private commercial property sector is down a sharp 16% in the 12 months to end Q2 2009. Wilkins Kennedy says that this is the lowest quarterly level since Q3 2003.
New work in the private housing sector dropped 28% in the year to end Q2 2009. According to Wilkins Kennedy, the value of new work in the private housing sector is now at its lowest quarterly level since Q1 1996.
The value of new construction work building industrial property in the year to Q2 2009 plunged 31%. Wilkins Kennedy says that investment in new industrial property has hit its lowest quarterly level since Q2 1983.
Construction sector expenditure on repair and maintenance (across the public and private sector) in the year to end Q2 2009 fell 7% and is now at its lowest quarterly level since Q1 2001. However, Nick Parrett says that construction work on repair and maintenance can only be delayed temporarily before expenditure bounces back. Nick Parrett explains that most property owners realise that delaying essential maintenance work could have a long term impact on capital values. Hope for green shoots here.
Wilkins Kennedy says that one sector that has benefited from the Government’s support is infrastructure where the value of new infrastructure work has been continuously increasing since Q1 2007. In the second quarter of 2009 expenditure was up again by 8% - a clear winner.
At last signs of recovery are starting to appear in the public sector housing with the value of new public housing constructions increasing by 3% between Q1 and Q2 2009. Nick Parrett explains that the Government’s initiatives to encourage housing associations to build new developments finally seem to be working. The suggestion is that funders are now looking more favourably on this part of the market.
ENDS
Press enquiries:
Nick Parrett
Partner
Wilkins Kennedy
Tel: 01689 827 505
Fay Israsena
Mattison Public Relations
Tel: 020 7645 3636
