The coalition government will be announcing its spending review on October 20th. As we have already seen, nearly half of the BSF programmes have been cancelled and those remaining will be under new arrangements. It seems to me that there will inevitably be further cuts in the public sector, as the government pushes forward in its objective to reduce the country’s huge deficit.
As a business within the construction industry, Innovation Fire Engineering has to face the fact that the decline in public sector building programmes will have a ‘knock on effect’ on the private sector, particularly in related industries. The first question to ask is ‘how is the reduction in work from the public sector to be replaced’?
My initial response to this question is to target private sector work or construction work outside of the UK. However, companies like us specialise in attracting clients within the UK. If we were to suddenly begin to target the international market, with no proven track record in this arena, then it would be very difficult for us to succeed. For other businesses in a similar position, the only realistic option would be to focus on gaining work from within the UK, by targeting the private sector.
The second question I would ask you, is ‘what areas of the private sector will grow and consequently be targeted’? If you get the answer to this million dollar question right, then you will be in a good position to replace public sector work with growth in certain areas of the private sector. But, without a crystal ball, getting the answer right is extremely difficult!
My initial thoughts are that there will still be growth in care homes, especially in dementia care homes, as people are living longer and there is currently a vast under provision of care facilities. What sectors do you think will grow in the next few years? Do you have an alternative strategy for your business for dealing with the significant reduction in public sector projects – now and in the future?
James Brady.
Director.
17/09/10
Although we have a 6%construction year on fall according to the Glenigan Index, this was due to the private sector.
I would say times are less gloomy. In the public sector Rises in the retail construction growth, industrial, lesuire and hotel products have all shown growth. Civil engineering has seen a massive 22% growth which can only feed other projects for the future.
So with little help from the private sector I see construction taking off within the next year.