Over the past couple of years, it's been hard to deny the fact that things have been quite tough for the UK construction industry. The recent recession had a big impact on the sector and despite the return to growth, it still seems to be struggling. Growth itself is still quite sluggish, which has impacted on construction demand. Also, banks are imposing strict lending conditions, which are making it hard for a lot of construction firms to get capital to finance their projects.
In terms of the current state of the UK construction industry, confidence among firms is currently quite low. Despite a relatively confident outlook at the start of 2010, this had fallen significantly by the end of the year and this mood seems to now be persisting into 2011. Part of this is due to the fact that there are issues in the housing market, with fewer houses being sold and fewer being built, which is having a knock-on effect for the rest of the industry.
A survey of UK construction firms also found that in comparison to the twelve months that have just gone, less than 50% of them think the next twelve months will be better for turnover. This shows that the industry is still quite shaky and there are further signs of worry in the market as 30% of firms actually feel less confident about the coming year than about the last year. However, particularly in the London area, some firms are starting to report good profits, which offer signs of hope.
The current trends suggest that things could be set to stay this way for a while yet. While there are signs that the UK construction industry is picking up in areas such as London, outside of the capital, firms aren't getting the benefit of this boost. As with much of the current economy, it seems that much of the growth will continue to come from the south of the country, with some economists suggesting that construction issues elsewhere could force the country back into recession.
Over the coming years, it seems safe to say that there will continue to be challenges faced by the industry. In particular, the fact that fewer houses are being built is of particular cause for concern and businesses in much of the country will continue to deal with sluggish growth. However, the growth in London and other parts of the industry seem as though they will be enough to keep the industry afloat and it's still the early days of the recovery so there is still light on the horizon.
In terms of the current state of the UK construction industry, confidence among firms is currently quite low. Despite a relatively confident outlook at the start of 2010, this had fallen significantly by the end of the year and this mood seems to now be persisting into 2011. Part of this is due to the fact that there are issues in the housing market, with fewer houses being sold and fewer being built, which is having a knock-on effect for the rest of the industry.
A survey of UK construction firms also found that in comparison to the twelve months that have just gone, less than 50% of them think the next twelve months will be better for turnover. This shows that the industry is still quite shaky and there are further signs of worry in the market as 30% of firms actually feel less confident about the coming year than about the last year. However, particularly in the London area, some firms are starting to report good profits, which offer signs of hope.
The current trends suggest that things could be set to stay this way for a while yet. While there are signs that the UK construction industry is picking up in areas such as London, outside of the capital, firms aren't getting the benefit of this boost. As with much of the current economy, it seems that much of the growth will continue to come from the south of the country, with some economists suggesting that construction issues elsewhere could force the country back into recession.
Over the coming years, it seems safe to say that there will continue to be challenges faced by the industry. In particular, the fact that fewer houses are being built is of particular cause for concern and businesses in much of the country will continue to deal with sluggish growth. However, the growth in London and other parts of the industry seem as though they will be enough to keep the industry afloat and it's still the early days of the recovery so there is still light on the horizon.
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