Construction contractors 'could be hurt by capital expenditure cuts'

Date: July 09, 2010

Category: Contractor Industry News

Contractors in the construction industry could experience a number of difficulties caused by a fall-off in the government's capital expenditure.

Dave Lowery, reporter at Construction News, has claimed that the recent growth in product sales was unexpected but that it is important to take the fact that there is a weak comparative involved into account.

It is easy to get carried away with this kind of figure when growth has been from an extremely low level, he explained.

While Mr Lowery claimed that the sector could still do well next quarter, as existing projects are still some distance from completion and the government cuts will take time to take effect.

He told construction contractors: "You are still going to get that growth in the short term because it is against particularly weak comparatives but it is in a year or two when it could hit the hardest."

His comments follow figures published by the Construction Products Association and Ernst and Young Construction Activity Barometer which showed that sales of construction products have risen and are at their highest rating in three years.

Posted by Sarah Putt