Brexit fear and delays hit construction sector - BLP Insurance comments on latest PMI
- Date: 02/07/2019
Following the release of today’s Construction PMI figures, Phil Harris, Director at BLP Insurance, comments on the sector:
“For the fourth month out of five, the construction industry is languishing in contraction. Plummeting more than five points from last month to 43.1, the sector remains beholden to the uncertain nature of Brexit and ongoing delays on major infrastructure projects.
“Costain is the latest industry big-hitter to issue a profit warning, sparked by cancellations to contracts and delays to the HS2 rail and motorway projects. This has sent the company’s share price tumbling and it’s another blow to a sector still recovering from the collapse of Interserve and Carillion.
“Further dampening the mood is news of rising business failures in the sector in 2018, which saw 202 companies slip into insolvency, compared with 152 in 2016*. With Mr Hunt and Mr Johnson taking an increasingly harder line on a no-deal Brexit scenario, SME builders across the country will be hoping they will not become sacrificial lambs in one man’s political power game.
“As the country braces for its next prime minister, the winning candidate must go beyond merely espousing Brexit bluster, and help reinvigorate a stuttering economy. After recovering from the economic crash of a decade ago and suffering through three years of Brexit related stagnation, the construction industry needs some positive momentum, decisive action from Whitehall and above all else a degree of certainty.”
*Source: French Duncan accountants report cited in https://www.insider.co.uk/news/construction-firms-going-under-highest-17271589
For further information please contact:
Alastair Doyle or Max Gibson
Telephone: 020 3697 4200