Squeezed margins are stunting innovation

By Paul Connolly2019-05-14T09:17:00

Construction is one of the largest contributors to the economy, but productivity has barely grown in recent years

Construction profit margins were brought crashing into the public discourse following Carillion’s collapse last year. Suddenly the media, politicians and public started to understand the fragility of margins – even within the sector’s biggest beasts.

Margins, however, aren’t just key to company profitability, but to the future of construction. Low margins stunt investment in innovation within a sector which is one of the largest contributors to the global economy, but where productivity has grown by just over 1% over the last two years.

Where perhaps Carillion did stand out was for its UK exposure, because against this global backdrop, the UK and London in particular has a growing profitability problem.

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