Kier hails recovery in UK construction
Construction and services firm Kier has said its booming order book demonstrates how the UK economy is recovering steadily.As part of its latest trading update yesterday (May 15th), the FTSE 250-listed firm revealed it has secured more than £500 million in new contracts since the turn of the year.This takes Kier's total forward order book above the £2.6 billion mark, with the company's finance director Haydn Mursell insisting this is evidence the construction market is picking up in both the public and private sectors."It is UK-wide, not just London-centric any more [and] this gives the recovery more stability," he added.In its results, the firm revealed recent growth in its property division has been maintained and has guaranteed future work worth in excess of £1 billion."The private housing business has performed well, supported by the government's Help to Buy scheme, and should deliver about 600 completions this year," Keir stated.This recovery in homebuilding has also been reflected in results published by Bovis Homes, which showed the volume of new homes constructed in the first four months of 2014 was up by 80 per cent year on year.Levels of residential construction are now at their highest since the global financial crisis of 2008 and subsequent recession, with record-low interest rates, general economic recovery and government initiatives such as Help to Buy boosting the property market and demand for new homes.Bovis said it expects the costs related to construction of properties will increase by around five per cent over the course of 2014, though this will be offset by higher house prices. Transaction values have been around three per cent above the company's targets since the end of last year and it is predicting a further five per cent increase by 2015.Last week, the National Institute of Economic and Social Research published research estimating the UK house price boom will continue for at least another two years, with values up by 7.8 per cent this year and 4.2 per cent next, but growth of just 0.6 per cent anticipated for 2016.
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