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Kier chief says worst of recession yet to come

Kier director Paul Sheffield has warned that the worst of the construction recession could be to come – and revealed a new focus on civils work.

Mr Sheffield said that the 12 months from summer 2010 could prove the industry’s low point, with the Government forced to reduce public spending but the private sector not yet recovered.

“June 2010 to June 2011 could see the bottom of net work available in the construction sector,” he said.

“My instinct is that the private sector comeback will be later than we want it to be to pick up the likely slack from the public sector after the next election.”

Kier is looking to grow its civils business to see it through the 12-month gap.

Mr Sheffield said: “The civils side could grow significantly over the next couple of years – that is our distinct strategy.

“Our civils business is nicely positioned in sectors where the spend is largely driven by legislation. The five-year water frameworks are all coming up for renewal in the next 12 months and we are targeting growth there.”

Spending on water, power, waste disposal and rail was likely to remain strong for the next few years, according to Mr Sheffield.

“The regulator demands continual improvements in water quality, and companies have to spend money. If they don’t spend money they get fined so that’s quite a good incentive for them,” he said.

“If we don’t build new power stations quickly the nation will be faced with blackouts, so that is a big driver. And if we don’t find something better to do with our waste than stick it in the ground then we will be paying through the nose through landfill taxes, so that’s driving waste schemes.”

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