Construction industry continues to brush off impact of Brexit vote
Commenting on the latest construction PMI figures, Helen Wheeler, managing director of construction finance at Bibby Financial Services said:
“The latest PMI for the construction industry shows a steadying of the ship after the drop off following the referendum result. The industry appears to be brushing off the initial impact of the Brexit vote, with projects starting to flow again and new work being generated.
“November’s figures show an improvement in order books for construction firms which correlates with the findings from our recent Subcontracting Growth survey. On average, subcontractors have 22 weeks of work in the pipeline, with almost two fifths (39%) of businesses saying that work volumes have improved since 2015. However, subcontractors are facing challenges. Only one in five (22%) benefit from national infrastructure projects, and over half (55%) feel they are forced to accept contract terms through fear of losing out on work. Subcontractors are also feeling the pain with the loss of revenue through bad debt. In the past three years firms have written off on average £50k as customers fail or are unwilling to pay for work undertaken.
“While large housebuilders and primary contractors drive activity in the market and stimulate supply chains, it is clear the industry needs a more even keel for subcontractors to benefit. Getting access to the billions being invested in infrastructure projects is vital so they can increase their pipeline and reduce their over-reliance on commercial contracts and housebuilding.”