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Construction industry will Lead the economic revival
Page 60
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Construction is the key to reviving the used market, as money tenders shorten risks, which is stopping operators and traders overextending themselves.
8y Kevin Swallow IT'S A SIGN OF the global world we all live in that dishing out ill-advised mortgages to would-be home owners across the Atlantic will have an effect on credit and risk ratings of UK hauliers and used vehicle traders.
Needless to say, things are tough. Finance and credit — the basis of recent good times — are hard to come by as major banks, investment houses and money lenders go pop, require a helping hand or are merging with rivals.
This has made the canny operator wary of taking risks, and trade is finding that only clean, late-year stock is making money. Older, scruffier examples are struggling to sell. But hasn't that always been the way?
Good deals
Unless the impending Christmas deliveries or a genuine boom in the economy drive essential purchases over wanton buys, surplus stock will always struggle to find a home.
That said, however, auction houses are positive, promoting good practice when it comes to presenting vehicles, and making sure sellers don't hold out for an inflated price.
That should stop operators overextending themselves on deals for desirable vehicles that might not earn a decent return out on the road. Exporters continue to ship alarming levels of stock out of the country. but in the UK, buyers are looking to secure anything up to five years old — and not necessarily just the older stuff.
The best barometer for a lift in fortunes remains the construction trade. As reported by CM [11 September], the tipper market is struggling a bit at the moment.
In 12 months, prices for tippers have plummeted, with operators opting for "inexpensive tractor units". But, as TruckEast's general manager for used vehicles, Paul Prewitt, says: "The tipper market is about to come back with a vengeance," citing the London 2012 Olympics as the saviour.
On the up
Prewitt's hunch is backed up by the recent prediction from the Construction Skills Network, which reckons the construction sector MU grow by 0.7% up to 2013.
Propping up that rise is public housing projects and investments in infrastructure.
For the next four years, the Olympic Games will act as the backbone to a rise in construction, that is set to peak in 2011.
Construction work
There is also other work. "The Victoria Line, East London Line and Docklands Light Railway expansion work, although not taking place specifically for the Olympics, have been scheduled for completion to coincide with the Games," says the report, plus Thameslink, Heathrow Terminal East and Crossrail.
The biggest growth area is infrastructure, which is expected to increase by 5.7% per year. These activities include the £3bn Transport Investment Programme in Scotland and Birmingham New Street redevelopment.
Of course, there is likely to be casualties. The M25 widening programme will be suspended in order to "avoid disruption to the influx of visitors to London during 2012".
The message to operators and people in the trade is one of caution and consolidation, but the good times, it seems, are just around the corner.,.