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Entrepreneur expresses concern about the future of the construction industry

The construction industry will have to “bite the bullet” according to Gary Summers – CEO of the Alumet Group – in the wake of the latest survey results showing that growth in the sector slowed still further in August.

The Markit/Cips Construction PMI index (a monthly survey of building firms) was a “disappointing” 52.6 for August – down from 53.6 in July.

The firm, which specialises in building facades and systems, now has a renewable technology arm, installing photovoltaic panels, branded as EOS Energy.

“Don’t sit back passively and hope the Government will come to the rescue,” advises Mr Summers. “If we want our construction industry to survive and contribute to economic recovery across the board we must meet the challenge head on and use ingenuity and creativity.”

Mr Summers added that what was even more worrying was data from the Office for National Statistics (ONS) that showed a sharp fall in new construction orders – the total of new orders in the second quarter of this year dropped to the lowest level since 1980.

“The drop in business is the result of Government spending cuts. Not only is the public sector pulling back on new projects, but consumers are feeling the economic pinch and banks remain reluctant to invest in construction, so the private sector is not filling the gap.”

Mr Summers said that in concert with the reduced activity, the building sector was also having to face an increase in costs – higher fuel and raw material prices were seriously impacting profit margins.

According to reports construction experienced the highest rate of insolvencies of any industry in the second quarter of this year.

Mr Summers, personally, remains optimistic that his company will not only survive, but prosper, while the industry rides out the tough times. He anticipates the turnover of Alumet will increase from £27-million this year to around £50-million by 2013. 

He said that during the previous recession he decided to expand, rather than stand still, and continued to invest significantly in all areas of the business. This proved to be a winning gamble which paid off.

 “To ensure customer satisfaction we increased our team with specialist staff such as a quality manager, environmental officer and aftercare manager,” he said.