If Aggregate Industries is waiting for the economic headwinds to improve – before progressing its application to quarry Straitgate Farm after continued delays – they may be in for a long wait:
Activity in the UK construction sector "dropped like a stone" last month as it suffered its steepest fall in output since the height of the financial crisis, according to a closely followed industry index.
The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index posted 43.1 in June, down sharply from 48.6 in May and below the 50.0 no-change mark for the fourth time in the past five months. The latest reading signalled the steepest reduction in overall construction output since April 2009.
Not only that. Construction firms are going under at the highest rate for four years; after the failures at Carillion and Interserve, witness the recent problems at Keir and Costain:
There are now signs that the sector may be facing some serious issues once again as output declines and employment numbers fall.
Last year we pointed to another aggregates company, posting that whilst AI’s profits were down 56% in 2017, Breedon’s profits were up 52%. Now even Breedon is finding the going tough:
On a like-for-like basis, underlying EBIT declined by six per cent... reflecting the slow start to the year due to severe weather, challenging markets, rising input costs and the general uncertainty around Brexit.
Of course, a no-deal Brexit is looking more and more likely as the pantomime in the Tory party plays out – "as though facts are meaningless":
If a no-deal Brexit is as catastrophic as predicted, this could create a perfect storm of job losses, citizens unable to pay off their debts and the economy tanking. This in turn, could lead to a run on the pound and interest rates rising – which is bad news for those with large debt.
Moody's, the international credit rating agency, predicts that the UK is likely to fall into recession after a no-deal Brexit.
So, if Aggregate Industries – and parent company LafargeHolcim, holder of the purse strings – are waiting for things to improve, it may be some time.
