Surge in construction profit warnings
Among the reasons given for the troubles hitting the sector was the lack of a forward pipeline of PFI deals, as the Treasury continues its review of the model.
“The impact of contracting credit, falling confidence, fiscal tightening and the PFI hiatus have been building on the sector for some time,” the report said.
It also warned that, while the government’s promises of infrastructure investment are positive, it will take time for these developments to filter through into projects on the ground.
“The benefit of rising new order levels won’t be felt until 2013 and there is still uncertainty surrounding the timing of public spending, while financing uncertainties limit private sector expansion,” said Keith McGregor, Ernst & Young’s head of restructuring for Europe, Middle East and Africa.