Construction industry slows down amid worrying political and industry backdrop
Following the release of today's Construction PMI figures, Phil Harris, Director at BLP Insurance, comments on the sector:
"The construction sector suffered its second monthly fall in a row down to 50.6, but scraped in just above the growth threshold of 50.0 which was an achievement in itself given the festive seasonal slowdown and the gloomy political and business backdrop.
"With two months left until the UK leaves the EU and no clear deal in sight, confidence in the construction sector on several levels is in short supply.
"Small residential building contractors, the lifeblood of the sector which have skin in the game on a personal level, are minding their costs carefully and are not committing to building new units until they are certain that they have sold the properties they have already finished.
"Without 'Help to Buy' and 'Shared Ownership', the residential sector would have undoubtedly dropped under the growth threshold. These finance schemes, whilst providing life support for the residential market and keeping prices fairly buoyant, are in turn exacerbating the long standing affordability problems for consumers.
"With profit margins under continuing pressure, the financial wobbles at Interserve and Kier have added to the lack of confidence within contracting and has contributed to a number of new commercial projects being put on hold. Credit insurers tightening the thumb screws on sub-contractors and suppliers has added to this toxic mix to erode confidence further."
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Notes to editors
BLP offers housing warranty insurance and commercial development latent defects insurance underwritten by Allianz Global Corporate & Specialty SE. Our insurance is a compelling alternative to the 'traditional' 10 year new home warranty solutions and our commercial latent defects insurance product is the most comprehensive in the market. Unlike traditional new homes warranties, BLP's insurance covers the building - not the developer - and does not ask developers to pay up front registration fees, ongoing membership fees, bonds, guarantees or deposits. For claims, only proof of damage is required not proof of liability. BLP's cover is approved by all of the major British mortgage lenders.
We provide peace of mind for homeowners and protect their investment from the risk of undiscovered defects, because: our insurance policies are backed by an AA rated global insurer; we will have properly assessed the build project from design through to workmanship on site, to help minimise the chance of future defects; and if a defect does arise the homeowner won't have to prove who is to blame, just that there is a defect.
We have been providing construction insurance since 1999 and are owned by Thomas Miller, a world class insurance services business at the forefront of the insurance industry for over 125 years. BLP is regulated by the FCA.
Thomas Miller Group
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