Construction sector slumped in May.
05/06/2019.
The construction sector slumped last month. Building activity in the UK dropped in May the third time in four months, according to IHS Markit’s latest survey.
It represented the sharpest decline in construction output since March 2018.
Commercial work remains the weakest performing category with output falling to the greatest extent since September 2017.
The May data also showed a decline in civil engineering activity for the fourth consecutive month. Construction companies cited constrained client budgets and a headwind from domestic political uncertainty or to put it bluntly Brexit.
However Residential building work continued to expand in May, although admittedly at the weakest pace for three months. Higher levels of house building have been recorded in each month since February 2018.
The overall drop resulted in the headcount in the sector falling at its fastest rate in six-and-a-half years with the sharpest drop in workforce numbers since November
2012.
UK construction companies indicated a renewed decline in total business activity during May. Lower volumes of commercial work and civil engineering activity more than offset a modest increase in house building. New orders also decreased across the construction sector, with survey respondents noting that subdued domestic economic
conditions had led to project delays and fewer tender opportunities.
What they said
Tim Moore, Associate Director at IHS Markit, which compiles the survey said “May data reveals another setback for the UK construction sector as output and new orders both declined to the greatest extent since the first quarter of 2018.”
“House building was the only sub-category of construction output to buck the downward trend in May, but growth remained softer than on average in 2018.”
“The soft patch for construction work so far this year has started to impact on staff hiring, with some firms cutting back on expansion plans and others opting
to delay the replacement of voluntary leavers. ”
Duncan Brock at the Chartered Institute of Procurement & Supply, which helps to compile the survey, said: “With the continuing uncertainty around Brexit and instabilities in the UK economy, client indecision affected new orders which fell at their fastest since March 2018 and particularly affected commercial activity,”
Howard Archer of the EY Item Club said it was “particularly worrying to see forward-looking indicators largely weaken.”
UK economy ‘close to stagnation’
The UK service sector however hit a three-month high in May, 51.0 from 50.4 in April, according to IHS Markit and the Chartered Institute of Procurement & Supply, who cautioned that Brexit and the global slowdown are dragging on growth.
The index came in at 50.9 once the manufacturing and construction industries were added in.
Chris Williamson, chief business economist at IHS Markit, said: “The PMI surveys collectively indicated that the UK economy remained close to stagnation midway through the second quarter.” Analysts believe the economy will grow by 0.2% in the second quarter of the year, notes the Telegraph, down from 0.5% in the first quarter.
This only adds to the evidence that UK plc is under extreme pressure at the moment.
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Are you owed money by a someone in the construction industry?
With pressures on the construction industry it is essential that you stay on top of the credit limits you grant and watch carefully for any late payments.
You can’t just assume your customers can and will pay you, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
See the section below – About CPA.
If you are also struggling, do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
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Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
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How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t let your bankers control you, contact CPA today.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply big builders or small ones, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
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0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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