BRITISH CONTRACTORS will cut jobs and could even pull out of Hong Kong altogether as over capacity and falling workloads hits construction, according to a report published this week by consultant High-Point Rendel.
The firm predicts a dramatic rise in the number of construction and property bankruptcies.
It has recently formed a joint venture specialising in corporate restructuring with accountant Baker Tilly.
The firm said 'two contractors and three property developers will fail every week'. By the end of this year, they will leave combined debts totalling £630M'.
Bill Kennedy, High-Point Rendel director and general manager, said falling public and private sector investment, increased competition and lower tender prices would increase construction business failures.
Government figures show the gross value of construction work carried out in the first quarter of this year fell a staggering £425M, or 21.9%, compared with the same period in 1997.
At constant 1990 prices, the average value of construction work carried out each quarter in 1997 was nearly £194M. This dropped to £152M in the first quarter of 2001.
Keith Probert, High-Point Rendel managing consultant, said the government's Works Bureau underspent its capital works programme by £318M between 1997-2001.