UK privately held businesses forecast the construction and property sector to be the worst casualty of the economic downturn in 2009, plummeting by 75 per cent in profitability and 71 per cent in turnover from the same period last year, according to a new study.
The figures released today form part of Grant Thornton's International Business Report (IBR), which canvassed 7,200 businesses across 36 countries. In the UK it sought the opinions of CEOs, MDs, chairmen and senior executives of 600 large and medium sized business.
Others areas within construction and property that are forecast to decline include selling prices by 43 per cent, investment in plant and machinery by 27 per cent and investment in new buildings by 31 per cent.
Clare Hartnell, head of property and construction at Grant Thornton said: "Profitability and turnover within the construction and property sector are significantly driven by sales and market value; 2008 was a turbulent year as credit dried up and confidence plummeted causing house prices and the number of properties sold to fall sharply. The decline in the residential market consequently has had a knock-on-effect on the construction sector where problems have been exacerbated by huge debts as many proposed developments have been put on hold."
"2009 is set to be a trying year to say the least. Part of the reason for this is the current state of the economy. Lack of available credit will have an adverse effect on the ailing construction and property sector," said Hartnell.