Building’s State of Play series kicks off with a look at the contractor market – here, three top bosses predict the future for UK contractors
This week Building is launching a three-part series looking at the health of the industry sector by sector. The State of Play series will kick off with an in-depth look at contractors and will be followed by analysis of the consultants and architecture sectors.
The contractor’s State of Play will include an overview of the challenges facing companies both big and small as well as the opportunities available and views from key clients on what they are looking for in an increasingly tough market as we slip back into recession.
Ahead of the full feature, which will be published on Friday in print and online, see below for three ‘Views from the Top’ - comments from three contractor bosses on what they think the future might hold for the sector. Then, tomorrow, industry expert and economic commentator Simon Rawlinson will give his verdict on the State of Play for contractors.
Views from the Top
Three construction bosses predict what the future might hold for UK contractors
John Stanion, CEO, Vinci Construction UK
“I expect demand to continue to decline in the building market for the next two to three years as cuts in public spending feed through into reduced demand in health and education and more generally. Private sector building demand is unlikely to expand to fill the gap and with the banking sector shrinking balance sheets, increasing capital ratios and becoming more risk averse, I expect this to act as a drag on recovery.
“Civil engineering should be more positive, but the key here is to create investment conditions that will encourage the private sector to support the objectives set out in the NIP. The level of competition is unlikely to ease and margins will remain under pressure for the period ahead. The industry remains, however, a potential engine for economic and employment growth if aspirations in the NIP can be met.”
Andrew McNaughton, chief operating officer, Balfour Beatty
“Given global demands, we see good opportunities for infrastructure lifecycle companies like ours both in the UK and abroad. The UK government is a firm believer in the virtues of, and the need for, infrastructure investment and we are excited by the opportunities in growth sectors such as rail and power and growth markets like Australia, Canada and India.
“We see good opportunities in the medium term for integrated infrastructure companies like ours. As opportunities arise, we are determined to be ever more efficient and competitive.”
Paul Sheffield, CEO, Kier
“The GDP figures were interesting - although the ONS needs to get to the bottom of the huge variability in the monthly figures, I don’t think they really represent what has been going on over the last six months in any detail. Housebuilding and infrastructure are reasonably buoyant, yet the traditional building sector is still very flat and there are few signs of growth. The ongoing review of PFI inevitably means that new schemes hitting the ground are still a few years away.
“However, those businesses that have the spread of capability to excel in the heavy infrastructure market do have significant opportunities ahead. So too is there a lot of scope in the many mixed-use re-generation schemes across the country for those who can masterplan and create their own opportunities through property development - that is a real focus for us at the moment.”