Advice for Construction Companies in Sector Contraction

September 30, 2019, By

A survey of 170 UK construction companies has shown the UK construction sector shrinking for the third month in a row.

The Construction PMI index also shows the sector has been in decline for five out of the past six months, with commercial construction the worst performing category, followed closely by civil engineering.

A combination of Brexit-induced economic and political uncertainty has caused a dip in business confidence and delays to infrastructure work.

This in turn has led to a slowdown in purchasing activity and delays to contract agreements.

It is, therefore, more important than ever for companies involved in the construction supply chain to act now to safeguard their futures and to be in a position to flourish when the sector does, inevitably upturn.

Businesses can protect themselves and manage risk by seeking appropriate professional advice.

For example, contracts and supply chains can be checked to see if there is exposure in the event of a no-deal Brexit due to price increases, delays in procuring imported materials or labour shortages.

The Construction PMI has seen significant fluctuations over the past 10 years and came back strongly after the last major dip in 2016.

Some forecasters and analysts believe the PMI will rise from its current rating of 45.3 to reach 53.7 in 12 months’ time. Any score above 50 shows the sector in growth.

This is a critical time for the sector and those taking the necessary precautions now will be best placed for the future.