The construction division was even able to showcase an operating profit of 13.7m as well. This indicates that situation might not be as bad as it appears.
In fact if we take a look at the developments of past couple of years, it appears amply clears that the levels of profit margin which used to be the trademark of this industry are no more available to the industry. Increasing levels of competition, more assertive consumers, increasing emphasis on quality, strict norms for deadline adherence, dynamic nature of business proposition etc are some of the factors which have led to the shrinking of profit margins in the industry. Pettinger (1998) also underlined the fact that the industry is now increasingly being dominated by client groups and peer pressure with too many contractors chasing too little work in the industry. The trend coupled with indications of imminent recession has become a cause of worry for the industry. Gilmore and Jordan (2008) also reported that the construction sector in UK has slumped to new lows with deteriorating conditions in the housing market. As the construction sector comprises of 6 percent of British economy, and if this significant sector is not able to contribute its bit towards nation's economy, then the country's economy will also come under pressure.
Therefore under the circumstances the construction companies are supposed to tread a cautions path with well planned strategic ...Show more