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 research is based on responses by 43 CEOs, MDs and owners of construction businesses (and also 402 businesses from other sectors) conducted by Vistage (www.vistage.co.uk), the leadership organisation for business owners.
Key findings from the latest Vistage Construction Confidence Index include:
· Almost four-fifths of medium-sized construction businesses aim to expand their workforce in 2015 (with 23% polled expecting to recruit this quarter and two fifths intending to recruit steadily throughout 2015).
· 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 a massive 86% expecting an increase in sales revenue over 2015 (9% expect sales to remain about the same, 3% expect them to fall).
· 70% expect their total fixed (capital) investment expenditures will rise over the next year, while just 30% 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% expecting to maintain similar costs and 2% looking to reduce their prices.
· Three-fifths (60%) expect their company’s profitability will increase over the next year, with only 5% 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%) expecting improved economic conditions and only 9% 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. The British construction industry has shown over the past 18 months to be the backbone of the UK’s grown 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.”