Business survey reveals building will be the industry worst hit by the downturn this year
Profitability and turnover in construction will both decline by over 70% in 2009, a survey of UK privately held businesses has found.
Business and financial adviser, Grant Thornton, canvassed 7,200 businesses across 36 countries. In the UK it sought the opinions of chief executives, managing directors, chairmen and senior executives of 600 large and medium-sized business.
It found that construction will be the worst hit casualty of the downturn, with expected falls of 75% in profitability and 71% in turnover this year.
Clare Hartnell, head of property and construction at Grant Thornton said: “Profitability and turnover within the construction and property sector are significantly driven by sales and market value; 2008 was a turbulent year as credit dried up and confidence plummeted, causing house prices and the number of properties sold to fall sharply.
“The decline in the residential market consequently has had a knock-on-effect on the construction sector, where problems have been exacerbated by huge debts as many proposed developments have been put on hold.
“2009 is set to be a trying year, to say the least. Part of the reason for this is the current state of the economy. Lack of available credit will have an adverse effect on the ailing construction and property sector.”