Greengates Builders Merchants Accrington, Lancashire Asks What Will The Recession Bring Next?
2009 was a difficult year for the UK builders' merchants, but conditions in 2010 present a brighter picture. According to research by industry analysts Plimsoll, the market is slowly emerging from the malaise of the last two years.
Senior analyst and author of the report explained: "The recession tore through the market in 2008 and most of 2009 and accelerated the rate of change in the market.
"Aggressive 'growth at any cost' operators have been forced to abandon their reckless strategies and many have been caught out and are in real trouble. However, some amazing companies have come through the recession largely unaffected and look set to make 2010 their year."
The senior analyst predicted "more job losses and consolidations. As the market improves there are a lot of companies, large and small, that survived by the skin of their teeth and they have to rebuild their profit margins and efficiencies.
"Our latest analysis projects that a further 7000 jobs will have to be shed if companies are to get back to profit and remain competitive in 2010. Whether through natural wastage or compulsory layoffs, job losses will be necessary.
"With the average sales figure for each employee down to £184 000, staff need to 'buy in' and contribute more to the recovery of their companies. Those who still have a job can expect to work much harder in 2010.
"Around £4bn worth of profit has been wiped from the market in the last year and employers have no choice but to cut their cloth accordingly and get more from their resources."
As for mergers and acquisitions: "We named 118 companies in that are ripe for takeover or merger with a larger parent. It's a buyers market in 2010, with many companies still recovering from the recession.
"Our report has picked some great examples of companies that are currently undervalued because of the recession that would be very attractive to prospective owners.
"For many struggling companies, a buyout may be the quickest route to get the company back on an even keel - even if it means relinquishing their independence.
"This will further increase job losses as new owners would quickly look for efficiency gains and to synergise their new acquisition with existing operations."
Here at Greengates Builders Merchants Accrington, Lancashire we are looking forward to the bright future ahead of us.