Accountant BDO Stoy Hayward said today that the United States Government’s £100bn planned civil infrastructure spend makes the country a prime target for construction firms from the G20 nations.
BDO Stoy Hayward has released research that shows that the US will provide the biggest opportunity for inbound construction projects in the future.
Despite some obvious hurdles, such as high levels of red tape and taxes, the US comes out on top of BDO Stoy Hayward’s G20 Heat map of areas within the G20 with the most potential for constrution work. This was because of the expected impact of the recently announced $150bn (£100bn), three year economic stimulus package. This proposes spending of around US$150bn (£100bn) on civil infrastructure over the next three years. The stimulus is the the largest investment since President Eisenhower developed the US highway system in the 1950s.
BDO Stoy Hayward head of construction Richard Kelly said: “As a rule, the construction sector is an industry that as been limited by national boundaries, with companies often ignoring the significant opportunities that exist beyond their own shores”.
“While the effort required to break into the USA, and other international markets, may appear to be daunting, even taking just a tiny nibble of this enormous cake could be enough to satisfy the greediest of construction business appetites,” said Kelly.
According BDO’s research the UK is second “hottest” with Canada third. Construction sectors in both countries are currently benefitting from preparations to host forthcoming Olympic Games’.
“The idea that the UK and Canada could offer more potential than China, Saudi Arabia or even India is startling,” said Kelly. “It clearly demonstrates the importance of carrying out a rigorous analysis of opportunities and balancing them with the barriers to entry.”
“Clearly there are opportunities to be had in the East and Middle East, but the combined clout of the top three countries makes it impossible to ignore the potential lying west of mainland Europe,” continued Kelly.
So what makes an attractive market?
BDO Stoy Hayward’s G20 Heatmap considered a number of factors which make a country attractive for inbound construction:
- The upcoming construction projects the country has planned
- Whether a country has the means to fund the construction projects it has earmarked
- The focus on taxation - including low rates of corporation tax, the flexibility of using shareholder debt, the presence and ease of obtaining tax relief, the time taken to prepare tax returns and the overall number of tax payments
- Strong credit ratings
- The ease of doing business
- Low corruption levels
- Few regulatory barriers.
“There are clearly some fantastic construction opportunities across the G20 nations. Companies now need to look beyond their home territories, weigh up the benefits and hurdles and seriously consider how they can take full advantage,” added Kelly.