2010: A good year for construction?

Could things be getting better?

The past two years have been amongst the worst for the construction industry with projects being delayed or cancelled altogether. However, a new international survey from KPMG indicates that two thirds of industry professionals believe that next year will see profits increase or stay the same by the middle of the year.

The annual KPMG's annual global construction survey, compiled by interviews with 108 senior construction professionals across 30 countries, revealed that professionals the world over will see their profits increase.

Despite the positive outlook in the sector, Fiona McDermott, KPMG's UK head of building and construction, warned that despite profit levels possibly staying at the same level, some companies could face rough times later in the year.

Speaking to Building.co.uk, she said "Many companies are living off the profits of contracts secured before the recession, and whether such performance can be maintained is dependent on a number of factors, not least a general economic recovery.

"Although the sector appears to be in fairly good shape at the moment, we have to ask ourselves: will 2010 be the year that industry feels the pain already experienced by other sectors of the economy?"

Not all good news?

Despite the majority of respondents having a positive outlook, many feel that the government stimulus packages provided by the likes of the Obama administration will bring a significant increase in opportunities in the next 24 months. Only 12 percent said they would be of substantial help. Those questioned in the Asian Pacific area were most optimistic, with 82 percent of those in the region expecting a moderate or significant increase over the next 24 months.

Other construction reports such as the US McGraw-Hill Construction Outlook 2010 Report
have stated that a corner was turned in 2009, aided by the emergency support being provided by the federal stimulus bill and the waning of the recession. However, it highlighted obstacles that will still need to be overcome such as tighter bank lending and the lack of fiscal freedom in state and local governments.

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