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Significant optimism found amongst construction contractors

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Limited company contractors trading in the construction industry will be interested to learn that new research has shown significant optimism in the sector, with regards to future growth.

The recent Global Construction Survey 2013: Ready for the Next Big Wave, carried out by KPMG, found that a considerable number of construction firms have been reporting increased order books and profit margins.

According to the report, half of UK firms said that at the end of 2012, their order books had increased by at least 5%, and 57% said that they expect their business to grow between 1% and 25% this year.

Of the construction firms surveyed, 100% said they were considering looking into the power and energy sectors, with 83% targeting rail, 33% industrial and 17% water.

Interestingly, many UK firms are also looking to expand overseas, with 60% saying the US and Canada are a top priority.

Richard Threlfall, UK Head of Infrastructure, Building and Construction at KPMG, said, “There has been a growing sense in the last couple of months that the worst is over and the results of our survey provide further evidence that construction activity is finally picking up. 

“Construction companies now need to invest in growth. What is holding back the industry now is not lack of demand, but the ability of businesses to resource for it and recruit sufficient experienced staff. 

“The next round in this highly competitive market will be won by those who have the resources to compete. Companies need to act now, because the industry’s resurgence is already underway.”

The recent Markit/ CIPS UK Construction Purchasing Managers Index (PMI), carried out earlier this month, revealed similar findings, as many construction businesses ended Q3 of 2013 with strong output levels and an improvement in their new order books.

This study found that all three broad areas of the construction sector posted higher levels of business activity in September. 

Residential construction was the strongest performing of these sub-sectors, with the latest rise in output the fastest since November 2003. Commercial construction activity increased at the most marked pace since May 2012, while growth of civil engineering activity eased from Augusts’ recent high.

If you’re thinking of becoming a contractor, you may be interested in visiting our Life as a Contractor case studies hub for real life stories on working through your own Limited company, taking money out of your Limited company, understanding IR35 and much more.

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