The construction sector operates at the tail end of the economic cycle, which means that the effects of the recession will still be clearly noticeable in 2011 and beyond. Companies are investing less and are cutting back on excess credit facilities. The expectation is that Strukton will continue to be confronted with cautious clients and occasionally the cancellation of contracts – for the time being mainly in the private client market.
However, its current order book consists primarily of projects for public sector authorities. Strukton is keeping a close watch on developments in its order book and the level of activity in relation to the size of the organisation so that it can take appropriate measures in good time. With regard to solvency, the company needs to be extra alert about payment risks – where additional collateral is regularly required – and the transfer of risks down the supply chain to subcontractors and suppliers. Strukton aims at reducing its vulnerability to cyclical fluctuations by ensuring that a substantial proportion of the turnover is from long-running and recurring projects.
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