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Growth is a great sign for the construction industry and the economy as a whole, but is your construction company prepared to take on more business?
It's unlikely to have escaped your attention that the construction industry is currently undergoing a period of rapid and encouraging expansion. For the last few months, the Markit / CIPS figures have revealed that the sector is steadily growing, and some observers have even suggested that construction industry expansion could very well be the influence behind the kick-start to UK economic recovery once again. However, what could this period of growth mean for your company? Is it sustainable, and if so, is there anything you should be doing in order to ensure that you make the most of the opportunity? Find out how our construction accounts management software could help you to leverage any opportunities that may yet come your way.
Will more contracts become available?
There is an argument that suggests the recent construction industry growth figures could be a little misleading. Many analysts have been quick to point out that growth has thus far been restricted to the residential sector, with the industrial and commercial construction sectors still comparatively stagnant. If your firm specialises in residential construction, then the Help to Buy scheme could mean that more contracts will be coming your way before long. The wider construction sector may have to wait a little longer, but there is a chance that economic recovery could help the industry to expand across both industrial and commercial sectors, too.
Will the industry continue to grow?
The question on a number of lips in the construction sector is this: is the current rate of industry growth sustainable? Again, it all comes down to the stability of the residential property market. If individuals continue to purchase homes with the help of the Help to Buy scheme, property prices could rise exponentially resulting in a bubble similar to the one we saw in 2007, putting a stop to market growth and causing the industry to stagnate once more. In the long term, it seems certain that the residential property market alone will be incapable of sustaining construction industry growth. An uptick in both industrial and commercial construction will also be necessary in order to move the industry forwards in future.
Is this an opportunity to expand my company?
Perhaps so, and perhaps not. Sustained construction industry growth will naturally result in more contracts, less market competition and the opportunity to expand established companies beyond their existing parameters. If this is simply a flash-in-the-pan occurrence brought about by the Help to Buy Scheme, however, then you may find your opportunities are limited before too long. Despite this, that’s no reason to sit back; it would be awful to miss out on a potential growth opportunity due to unnecessary conservatism. Particularly when construction accounts management software can help to keep your profit margins high by providing detailed job costing and CVR information on a project by project basis, you may find that you are more informed about your actual financial situation and potential for future growth based on your contracts’ profitability to date.
It remains to be seen whether the current trend for construction industry growth will prove to be sustainable or whether, in fact, it is simply an illusion – though it is worth bearing in mind that if there is a positive outlook from all sides, the economy is likely to reflect this optimism with higher growth figures. Regardless of which outcome is the case, all construction firms can benefit from the money and labour-saving functionality of construction-specific accounts management software. Why not take a look at our range of construction accounting solutions or contact us for more information?
