Following the release of the latest UK Construction PMI today (6 September), Joe Sullivan, partner at MHA, believes the Summer holiday season and government paralysis have brought construction down to earth:
“The industry has managed to maintain growth since early 2022 until the tables turned last month. The summer holiday season and the paralysis of government over the past 6 weeks have stunted the industry, especially the civil engineering sector. The contraction does not look like it will begin to abate any time soon.
“The number one priority must be to guard against soaring energy costs causing a rash of business failures in the sector.
The new Prime Minister Liz Truss could take two measures immediately to help: reinstate the red diesel rebate and provide additional support for the most energy-intensive aspects of the sector, such as aggregate, asphalt and cement businesses. These measures would help curtail the inflationary pressures throughout the supply chain.
“The labour market remains very tight. Skilled tradespeople increasingly shop around and work where the pay is highest which serves as an added stimulant to wage inflation.
The Construction Industry Training Board (CITB) recently stated a larger number of workers are needed to deliver on industry demand in the medium term.
The concern is that when businesses are focussed on survival recruitment, training and skills development may all suffer, storing up further issues for the future.”
MHA is a network ranked the 12th largest accountancy group in the UK. It comprises of 19 offices nationwide with a strong reputation for specialist industry knowledge and that collaborate and share best practice to provide outstanding client service. The network has 106 partners and 1152 staff across the UK.
MHA is the UK independent member of Baker Tilly International, one of the world’s largest leading international networks of independently owned and managed accountancy and business advisory firms, operating across 148 territories.
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