Steel specialist says London office projects being deferred to 2012
Steel specialist Severfield Rowen has warned that trading in the second half of the year will be “poor” with a number of London office projects and some power schemes having been recently shelved.
The statement is the first public indication of the knock-on effect of recent weak economic data on the confidence of commercial developers to start new schemes.
The firm said this year’s results would be in line with expectations, but said demand and pricing remained weak in the UK and Ireland. In addition it said tender prices remained “very tight”, limiting the firm’s ability to absorb “significant rises” in steel prices.
It said: “The outlook for the second half of 2011 is poor, very much in line with newly released industry forecasts. A number of commercial office projects in London and some projects in the power sector are being deferred until 2012. Overall UK demand for 2011 will be lower than expected as a result of slower than anticipated economic recovery.”
Ultimately it said it was lowering expectations for 2011, with “some recovery” expected for 2012.
However, the company announced it had signed a formal alliance with Saudia Arabian steel firm Zamil Steel Industries, which it said would enable it to provide enhanced structural steelwork design, fabrication and erection for clients in Saudi Arabia, the Middle East and North Africa.