- Sector hoping for stimulus in tomorrow’s Autumn Statement
Richard Lyle, director in KPMG’s infrastructure practice, comments on the latest Markit/CIPS UK Construction PMI which shows construction output returning to contraction at 49.3 in November, down from 50.9 in the previous month:
“The Markit/CIPS Construction PMI backs up the feeling in the market that 2013 is going to be a difficult year for the construction sector. Order books are at best flat or declining and large projects are coming to an end.
“The most worrying feature in this latest set of figures is the large decline in new orders. The industry has been working out their current projects and hoping for an uplift in the pipeline of work. This has not happened and will put a very real strain on main contractors and particularly the supply chain that relies so heavily on them for their work.
“The real issue is the lack of confidence and funding available for large projects. Until this changes projects will not get off the drawing board and even then it will be a long time before they are “shovel ready”.
“Businesses throughout the construction supply chain will need to really think about how they do business and look to make dramatic changes to remain competitive over the next year or two.
“The construction sector will be watching the Autumn Statement very carefully to see if the Government is going to announce anything which will make a significant change to the outlook. It will also be interesting to see what effect the new PFI (PF2) model will have on the future order book and if this will drive future growth.”
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