September 2019 – Top 100 Construction Companies
Exactly two years ago I noted two things: one was that the four contractors at the top our monthly Contracts League table were previously unheard-of joint ventures. The other was that our annual round-up of the Top 100 contractors had revealed that while average turnover was still increasing, profitability was suffering.
Those four joint ventures had appeared courtesy of the first major HS2 contracts being let. Totalling about £6bn, they pushed the monthly total from the usual £4bn-£5bn to an unprecedented £11bn.
This year, the picture couldn’t be more different. Admittedly, those HS2 contracts were exceptional, a one-off. But last month’s tally of new contracts was less than £3.2bn.
As for the Top 100, well the picture this year shows turnover and profit up slightly but a closer look reveals an industry under pressure, with insolvencies on the rise and profit warnings at a 20-year high.
For over three years UK construction has defied the received wisdom that the Brexit vote would stifle growth; but now it seems that Brexit paralysis is starting to take its toll.
Even HS2 is under threat, though Brexit can hardly be blamed for that. Indeed, can Brexit really be blamed for anything until it’s actually happened? The current malaise is the result of the political limbo of the past three years which has allowed rumour, speculation and fear to run riot. At the moment we have all the questions and none of the answers. Surely even “no deal” is better than “no clue”.