The U.K. Construction Industry: Where It’s Been, Where It’s Headed. Maybe

The past five years have seen hard times for the U.K. construction industry and the forecast for the near future would appear to be bleak, although there may be cause for a cautious optimism

Just in case you haven’t heard the news, we’re in the midst of a world wide recession. Or possibly a depression, depending on whom you talk to. Unless one is a member of a primitive tribal society, no industry, business sector or individual remains unaffected.

Britain is experiencing it’s first “double dip” recession since the 1970’s according to the Office for National Statistics. A recession is defined as the GDP falling for two fiscal quarters in a row, and this has happened twice since 2008. After experiencing a long period of steady and reliable growth between 1995 and 2006 with an average growth rate of 1.6 percent, U.K. construction suffered a serious bloody nose in December of 2008 when it experienced it’s biggest decline since they began keeping records, mostly as a result of a lack of demand for new housing. Things haven’t gotten better since then. The U.K. construction industry has seen losses every year, with the Construction Products Association reporting in October of 2011 that since the recession began the industry had lost over £32bn in business. Chief among the factors cited in the continuing sluggishness in the industry are a lack of private sector funding and the difficulty of securing credit.

The current situation for Britain’s construction industry doesn’t look much better with construction dropping another 3% in the first quarter of 2012 according to the ONS. The CPA doesn’t expect any improvement until at least 2014. Furthermore it is estimated that another £10bn of public funding will be cut from construction through 2013.

Gloomy and depressing? Maybe, but no need to go jumping out a window just yet. Even the most pessimistic industry analysts and economists concede that things will have to get better eventually. What goes down sooner or later has to come up, right?

One bright spot for the industry is London, which will see construction begin on a new cross rail network, with Transport for London estimating the creation of 7,000 new jobs. Work is slated to continue through 2017. And the city’s aging infrastructure promises continuing development for the foreseeable future, not in small measure because of preparations for the upcoming summer Olympic Games in July of 2012.

Speaking of the Olympics, a lot of analysts and politicians seem to be crossing their fingers in hopes that the revenue generated from the thousands of tourists, athletes and media thronging to the city might, just might, be enough to drag the slumping economy out of its doldrums. It seems a bit of an ethereal hope, but who knows?

All things considered, it looks like the U.K. construction industry is in for at least a few more years of struggle. But those in the industry can at least take heart in the fact that they aren’t suffering alone.

About Green & Co

Recently awarded Independent Firm Of The Year, Wales at the British Accountancy Awards 2014, we are a forward thinking and dynamic accountancy firm that play a fundamental role in enabling clients to achieve their business goals through the provision of effective, innovative and unique services. We are not your typical accountant, as we are proactive in helping our clients to grow their businesses in the way they want. We support our clients with our knowledge of taxation, our commercial acumen and the catalytic business opportunities we create, making Green & Co the power behind your business. In particular, we focus on: - Defining your future - We are experts at supporting our clients in setting achievable, worthwhile business goals. Our business planning tools enable us to help our clients create their future success. - Minimising tax - Our knowledge of taxation is second to none, and we save our clients £1,848 in tax for every £1,000 in fees. - Creating business opportunities - We don’t just manage your taxation, we aim to stimulate growth in your business, using our business acumen and connections to help you take your business to the next level. - The quality of our service - Our highly trained and friendly team stay on top of the ever changing rules and regulations, and we are always on hand to give you advice and support. We are committed to providing a proactive, efficient and friendly service to all our clients, and we lay out our commitment to you in our Client Care Charter. Everyone receives the same high level of director attention, professionalism and dedication. We have been helping clients to grow their businesses for over 20 years, so please contact us to arrange a free consultation to discuss the future of your business.
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