Hanson CEO Patrick O’Shea says a UK housebuilding boom has not raised construction spending to pre-recession levels as investors still hesitate to build office blocks and shopping centres. “Everyone gets very euphoric about the housing recovery, thinking that the UK construction industry hs recovered,” O’Shea said in a phone interview with Bloomberg news agency. “It’s still 20 percent below where it was at the peak, even with the housing and the infrastructure booms, which are both by-and-large governme
Hanson CEO Patrick O’Shea says a UK housebuilding boom has not raised construction spending to pre-recession levels as investors still hesitate to build office blocks and shopping centres.
“Everyone gets very euphoric about the housing recovery, thinking that the UK construction industry hs recovered,” O’Shea said in a phone interview with Bloomberg news agency. “It’s still 20 percent below where it was at the peak, even with the housing and the infrastructure booms, which are both by-and-large government initiatives.”
UK home prices rose to a record last month, helped by Chancellor George Osborne’s loan programme to make first-time urchases easier. While the government also invests in major infrastructure projects alongside a separate €63.75 billion (£51 billion) loan-guarantee initiative, commercial projects don’t benefit from any subsidies, O’Shea said.
“Commercial is the biggest sector at something like £20 billion (€25 billion), but our projection for its growth rate from 2013 to 2017 is only 3% annually,” continued O’Shea during the phone interview. In contrast, the Hanson CEO predicts housing and infrastructure investment will average about 7% growth annually to 2017.
Hanson is the UK brand of Germany’s HeidelbergCement, which has a market value of €10.75 billion. HeidelbergCement acquired Hanson for €13.53 billion in 2007, just before the global recession led to a slump in construction projects. HeidelbergCement’s shares have slumped about 40% since the purchase of the UK’s third-biggest cement maker.
The €1.375 billion (£1.1 billion) generated in UK sales last year, represented about 10% of HeidelbergCement’s total revenue.
