Survey shows construction industry has largely side-stepped recession

The global construction industry had escaped the worst of the recession, even though there would be places "where things will fall apart", said KPMG industrial, automotive, pharmaceutical and construction industries director Gavin Maile, speaking in Johannesburg.

However, he added that South Africa was unlikely to be one of these places. The audit, tax and advisory firm recently released its fourth global construction survey.

The survey, concluded in November last year, covered construction companies in 30 countries, including South Africa, with revenues ranging from $250 million to $5 billion.

Maile said the good news was that 53 percent of respondents noted they still had the same project pipelines as, or bigger than, 12 months ago.

Also, 64 percent of all respondents were confident that profits would rise or stay the same over the next year.

However, contractors in Africa, Europe and the Middle East appeared to have been harder hit by the recession, with 54 percent indicating that their projected profit rates had declined.

Most companies taking part in the survey said they had worked hard at becoming leaner over the last 12 months.

Only around 35 percent of companies had managed to avoid job cuts.

Bid evaluation risk was seen as the single biggest concern. However, the construction industry was still on a solid footing.

KPMG engineering and construction practice international sector leader Geno Armstrong said there was a perception that the global financial crisis had devastated the construction industry.

"Although it certainly has had a significant impact on the way these companies do business, we've found they view these conditions as an opportunity to get leaner. When the recovery does finally arrive, these companies should be well prepared to succeed," said Armstrong.

This article first appeared on www.engineeringnews. co.za.

Posted at 08:25AM Feb 15, 2010 by Editor in Market  |