LEADING mid-tier accountancy firm French Duncan has urged firms operating within Scotland’s construction sector to develop a growth strategy in response to the industry-wide decline in new orders.
Greg Callan, a partner at the firm, notes that many construction companies have been through the painful process of down-sizing, are currently trading at lower levels than several years ago, but remain waiting for market conditions to improve.
He suggests that the more enlightened firms are already adapting to the new economic reality by establishing a strategy for medium term growth based on the likely market conditions in the construction sector in the next three to five years and thinking about what steps they should be taking now and what segments of the market they should be focusing on.
“Given that savage public sector cuts remain ongoing and the unanswered question of where development funding can be sourced in view of the banking sector’s continued reluctance to lend, it is vital that construction companies seek to grab the initiative and exercise some degree of control over the situation in which they find themselves rather than resign themselves to waiting out the downturn in hope of an upturn,” he said.
“Whatever the particular growth opportunity, going forward, construction companies will require to be leaner and apply a more strategic approach to their development because the world has changed over the last five years and they are no longer going to be able to fund new projects the way they were funded before the downturn.
“Securing finance might well be difficult – but just because it is difficult does not mean that companies can ignore it and wait for banks to start lending again. Rather, they need to face up to the new economic climate within which we all find ourselves and confront it head on.”
Callan advises owner /managers to take control of this uncertainty by adopting a strategic approach to the future of their business.
“This is a critical time for the construction sector and it is incumbent upon owner/managers to ensure that they have trust in the capability of their professional advisors to guide their progress rather than merely reporting on the past,” he said.
“Despite all the well-documented challenges, a huge part of the Scottish economy is either directly related to the construction sector or is affected by it. The key to survival and growth for construction companies is to think about how to build a business based on where we are now rather than simply waiting for the upturn. Finding the right trusted advisor is the first step towards developing an effective strategy for growth.”
For further information please contact Greg Callan on tel 01786 451745
Issued on behalf of French Duncan by Liquorice Media tel 0141 561 4018 www.liquorice-media.com
Date 30th January 2013