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Great expectations for the year ahead

The impending general election is not denting construction industry confidence in 2015, says Vistage research

Posted by Dave Higgitt | February 27, 2015 | People, policy, politics, money

Britain’s construction businesses are expecting a strong 2015 for sales and investment, and are continuing to recruit strongly following 18 months of high optimism about the economy, reveals the new Vistage medium-sized business confidence index. The business owners’ organisation based its research on the responses of 43 CEOs, MDs and owners of construction businesses and also 402 business from other sectors.  

Key findings include: 

• almost four-fifths of medium-sized construction businesses aim to expand their workforce in 2015 (with 23 percent polled expecting to recruit this quarter and two-fifths intending to recruit steadily throughout 2015) 

• owners of British mittelstand construction businesses continue to be strongly optimistic about the forthcoming year. Over three quarters (78 percent) expect the economy to improve, without anyone expecting it to get worse – a slight improvement on the high levels of confidence that appeared in Vistage’s research last quarter

• the expansion of the workforce at most construction businesses is being driven by strong expectations that the better economic times will translate into sales – with 86 percent expecting an increase in sales revenue over 2015 (9 percent expect sales to remain about the same, 3 percent expect them to fall)

• 70 percent expect their total fixed (capital) investment expenditures will rise over the next year, while 30 percent predict their investment levels will stay constant

• almost two-thirds are expecting the prices of their services/products to increase over the next 12 months, with 33 percent expecting to maintain similar costs and 2 percent looking to reduce their prices

 • three-fifths (60 percent) expect their company’s profitability to increase over the next year, with only 5 percent expecting lower profit 

• they also felt that 2015 was on the whole going to be a much better year for the UK economy, with nearly half (45 percent) expecting improved economic conditions and only 9 percent expecting things to be worse.  

Steve Gilroy, CEO of Vistage, said: “The construction industry is optimistic about what lies ahead in 2015. Capitalising on the strong economy, construction businesses are investing strongly in capital assets and creating more jobs, while expecting strong sales and profit growth throughout the year.

“Regardless of May’s general election, UK construction business owners are generally expecting a strong performance this year, and not worrying about the election’s uncertainty on impacting output.

“This is good news for the whole economy. Over the past 18 months the British construction industry has shown itself to be the backbone of the UK’s growth and one of the keys to its prosperity, a skilled workforce and a balanced economy.

“While entrepreneurial start-ups are great for the future, most remain small and create few jobs. By contrast, the construction industry is crucial to the growth of the economy for job creation and big investment when the conditions are right ... as they are now!'

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