Euler Hermes comments: UK Construction PMI – May

02.06.2017

Paul Trigg, construction specialist and assistant head of risk underwriting at Euler Hermes, said:

Despite robust performance, the construction sector is eager for the new Government to secure a transition deal with the EU, at the very least, to address concerns on the supply of migrant labour, raw materials and inward investment.
Housebuilders simply don’t have the materials and resources to meet the current target of building 200,000 new homes a year. Leaving the Single Market will only make tackling the labour shortage a tougher task and put the political manifesto pledges for housing firmly out of reach.
A forecasted drop in foreign direct investment (FDI) is also cause for concern. We expect levels to slide by 1.9 per cent this year, 2.3 per cent in 2018 and a further 2.5 per cent in 2019. Any falls in FDI or domestic investment may have a detrimental effect on major infrastructure developments, such as Hinckley Point and HS2. Project delays could put a greater strain on cashflow and businesses will need to be increasingly vigilant of financial risk.

 

 

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