Surge in construction profit warnings

10 July 2012 The UK construction sector has witnessed the highest number of profit warnings since the credit crisis of 2008, according to a new survey.
Figures compiled by consultancy Ernst & Young found 41% of FTSE Construction and Materials companies issued profit warnings during the first half of 2012, and led profit warnings across all sectors in the second quarter of this year.

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.

This page was last updated on:
28 October 2014.

thumb

Stuck in the past

Eighty-five years to the day since the event that triggered the Wall Street Crash and the Great Depression, the global economy is far from secure

thumb

Give it a Year

There are a lot of personal and professional milestones for WSP director Gary McCarthy over the next few months. As he tells Amanda Nicholls, coping with change is what his career has been built on

register

Register now to get un-restricted access to all sections of the website.

Want to see more first? Try our free preview...