黑洞社区

Contractors are faring far worse than housebuilders in the battle for improved margins and look more vulnerable to any post-EU referendum downturn, 黑洞社区鈥檚 latest Top 150 Contractors and Housebuilders survey has revealed.

With listed contractors due to begin reporting interim results next month 鈥� the first since the EU vote 鈥� the survey shows the average profit margin of the top 50 contractors fell to just 1.05% last year, down from 1.16% in our previous survey.

More than one-fifth of contractors in the table also reported a loss.

But the results show the profit margins of the top 30 housebuilders hit a healthy average of 14.4%.

The results come amid growing signs construction could be heading for an EU referendum-induced recession. Latest figures from the Office for National Statistics, published last Friday, showed sector output fell 2.1% month-on-month in the run-up to the vote in May (see page 17). Economists have repeatedly warned that uncertainty sparked both before and after the referendum could tip the sector into recession.

Analysts warned the sector鈥檚 profit-starved contractors could be ill-prepared for any downturn.

Kevin Cammack, analyst at Cenkos, said contractors were still struggling with the hangover from the last recession in 2008/9.

鈥淐ontractors have got nowhere near as far along the recovery path as you鈥檇 expect at this stage in the cycle,鈥� he said. 鈥淕enerally they will look to rebuild their order books first, before then rebuilding margins. Now they鈥檙e facing theprospect of order books starting to dry up again.鈥�

In contrast, housebuilders have generally boosted turnover and profitability while reducing their debt burden. Cammack said: 鈥淭he housebuilders鈥� ability to combat [any downturn] has probably never been greater.鈥�