On the back of another successful month for the construction industry, subcontractors are looking to the future with hope – a boom in the construction industry means more contracts, more work, better prospects, and better cash flow. At least, that’s the picture in theory – how does it look in reality? How do construction subcontractors manage their finances so they can take advantage of the uptick in construction work available? Here we look at why healthy cash flow and construction finance is essential for a healthy subcontractor workforce.
What is the Growth in the Construction Industry?
The construction sector grew in July at a faster rate than any other time since the 2007 economic crisis, according to data from Markit, who compiled a survey of construction firms and discovered that the purchasing managers’ index (PMI) of the industry rose to 64 in July 2014. A figure above 50 means the sector is growing, while a score of 64 is highly positive. These results show that activity has been on the rise for four months on the go – and this is due in part to an uptick in residential homebuilding across the UK. All this is good news for the industry in general, but it can cause problems for SMEs and subcontractors that are not prepared for expansion.