Skanska has warned that Brexit has impacted the UK civils market, as the Swedish group downgraded its forecast for the coming year.
In its six-month report for January to June 2019, Skanska downgraded its outlook in Europe, with a weak market expected in both the building and non-residential sector and the civils sector in the coming 12 months. The firm’s expectations for the civils market have fallen compared to the previous quarter.
The company said: “In the UK, the uncertainty related to Brexit is limiting investments in the non-residential building market and is also impacting the civil market negatively.”
Overall, Skanska’s revenue for the first six months of 2019 fell by 3% to SEK 80.9bn (£6.7bn), while its operating income increased by 61% to SEK 3.2bn (£270m).
President and chief executive Anders Danielsson said: “In construction, we are progressing in line with our strategic plan to gradually improve profitability. We are completing projects with low profitability, mainly in Poland and the USA, and focusing our operations in an overall simplified structure. We are also reducing the risk in our backlog of future work by being very selective in our bidding process. Overall, the order bookings are lower than our revenue, but we continue to allow for higher bookings in our well-performing units.
“Looking at the market situation, it is overall positive but with a slightly weaker outlook for the coming twelve months in certain segments and markets. The competition in many of our markets is fierce and complexity in projects and contracts is increasing. We have for that reason put efforts into improving our contract management and claims management process.”
