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Contractors see boom ahead

Contractors file

A SURGE in contracting workload in the coming year was the undeniable conclusion from the NCE Contractors File 2001, published with NCE last issue (26 July/2 August).

The top 20 alone reported work in hand in excess of £5.5bn, £1.2bn more than their combined turnovers and up a staggering 64% on work in hand last year.

The trend throughout the industry is upwards, with turnover an average 4% higher this year. Among the top 20 contractors the results are better still, with over half recording growth in turnover in excess of 10% and just five firms showing a dip.

Over two thirds of firms expect to better this increase within the next two years, compared to just over half last year.

More remarkably, over 40% expect an increase of 20% or more, against 27% previously.

Confidence in the market is also raising expectations of improved profitability, with almost 50% of contractors looking for margins greater than 5% in the next two years and over a quarter looking for 10% or more.

However, 40% remain traditionally cautious, predicting margins between 3% and 5%.

A soaring road market appears to be the main reason for the boom, with an aggregate turnover approaching £1.4bn making it the number one market last year.

Confidence remains strong for the coming year too, with roads and road bridges the clear favourite of contractors when asked to identify two areas likely to show greatest growth. This represents an amazing turnaround on 1999 when road building barely registered a vote.

In contrast, contractor confidence in rail is falling, with contractors expecting growth polling a third less votes than roads.

Water and wastewater was selected as the second best growth market, reflecting its position behind roads as the second best performing market in 2000, with an aggregate turnover in excess of £1bn.

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