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Increased Turnover Reported From 10% Of Construction Businesses
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As we enter into December, the Department for Business and Trade have released their monthly statistics on 6th December 2023. We discuss below turnover trends, turnover forecast, future price increases and construction output.
1. Turnover Trends:
In October 2023, a substantial 20.6% of construction businesses reported a decreased turnover when compared to the previous month, while 10.6% advised of an increased turnover. There is a decrease of 4% in the number of construction businesses reporting an increased turnover when comparing October 2023 with September 2023, a continued trend.
2. Turnover Forecast:
December is traditionally a quieter month for the construction industry and this is reflected in the turnover forecast for December as around 27% of construction businesses are anticipating a decrease in turnover. However, 45.7% of construction businesses expect their turnover to stay the same, this is down from the 56% of construction businesses who expected their turnover to stay the same for the month of November 2023.
3. Future Price Increases:
Despite the uncertainty above, future price increases seem to remain stable with only 12% of construction businesses considering price increases in December. The majority, a staggering 63% expect their prices will stay the same, an increase of 11% when compared to the expected future price increases for November.
4. Construction Output
In September 2023, the monthly construction output increased by 0.4% in volume, a stark contrast from the 0.5% decrease in August 2023 and 0.4% decrease in July 2023. The increase in construction volume for September 2023, can be attributed to an increase in repair and maintenance.
Concluding Remarks
Naturally, as we enter into the winter months, activity in the construction industry starts to reduce, increasing the likelihood of insolvency and uncertainty. On a positive note however, the vast majority of construction businesses are not considering price hikes in December showing some sign of stability. Due diligence at this time is key in conjunction with closely observing key suppliers and clients for any early financial warning signs, mitigating the risk of bad debts.