City analysts have warned that the uncertainty of a hung Parliament will delay recovery in the construction industry
It follows the expected result of no overall majority for either the Labour or Conservative party following yesterday’s General Election.
Howard Seymour, a construction analyst at Numis Securities, said the outcome was not good news. “It will be a longer time for things to pan out and get any visibility on the cuts that are to come.”
Kevin Cammack at Cenkos Securities added: “A Lib/Lab pact would be the best outcome in the short term for construction firms in terms cuts being delayed, but it would mean anything where the essence of policy is in the detail, such as planning and housing, would get pushed into the long grass.”
Francesca Raleigh, a support services analyst at Numis Securities, said: “A hung Parliament was always the greatest fear for the sector. While there are more positive longer-term trends towards outsourcing and the need for greater cost efficiency, this election outcome is likely to create delays to this process and provide greater hiatus for the sector.”
In early trading this morning, construction stocks were reacting with indifference to the prospect of a hung Parliament.
Trading screens were a sea of red but this was largely due to the fact Wall Street fell by over 3% yesterday amid concerns over the high level of debt in the Eurozone countries including Greece.
Stocks were down by the following:
Balfour Beatty -2.8%
Taylor Wimpey -0.5%
FTSE 100 - -1.5%
FTSE 250 -2.1%