Podcast - International Business Report 2010 - Construction & Real Estate sector
Tuesday, July 20, 2010
| Posted by: Grant Thornton
| Tags: business,
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It is fair to say that there is some optimism creeping into the mindset of the players in the construction and real estate sector. Transactions are definitely on the up. However there is still only limited finance available.
There is pressure on margins across the board, whether that is construction businesses fighting to secure new contracts or foreign investors into UK real estate putting pressure on yields. The construction industry are seeing the impact of the downturn more at present as older contracts come to an end but new contracts are harder to win. It will be interesting to see how any cut back in spending by the UK government will further impact on the construction sector. We may see property developers joining forces with construction businesses - so that the developer can secure the construction services required with more flexible payment terms, and at the same time providing work flow for the construction businesses.
The big question in the UK that remains unanswered is whether there will be a second dip in the economy. Opinion is divided. Businesses have now woken up to the fact that change can happen quickly and they need to be able to react quickly, not only to minimise the effect of any further downturn (if that did happen) but also to take advantage of opportunities that may arise.
Grant Thornton’s second International Business Report (IBR) reveals that privately held businesses (PHBs) in the construction and real estate sector are markedly more confident about their economic prospects for the current year compared to last.
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