Blockbuster construction projects delayed by inflation and rising rates says steelmaker Severfield
High inflation and rising interest rates have pushed back some high-profile building projects according to a trading update today from the steelmaker Severfield.
The delays include a pause in construction of a new, £600 million film production site near Broxbourne in Hertfordshire for Sunset Studios. That meant the potential income from the project was removed from Severfield’s order book in July.
The London-listed metal firm said the delays came “as clients wait for economic stability”. It added that “lower tendering activity” was a factor, “particularly in the distribution sector.”
Shares in the company fell 2.6p to 65.2p today.
Overall, Severfield said it was “pleased” with what it called “the continuing high quality” of its order book, which was at £479 million at the start of September, down from £510 million in June. Around 90% of that business will be in the UK, with £337 million for delivery over the next 12 months.
The company is the UK’s biggest structural steel supplier and has helped build some of London’s biggest landmarks, including the Shard. It also provided the framework for the new Compton and Edrich stands at Lord’s cricket ground as well as for Tottenham Hotspur’s new ground.
It can produce around 300,000 tonnes of fabricated steel a year at six sites in the UK and one in Europe and a joint venture in India.
It also said: “Many of our chosen markets continue to have a favourable outlook - the Group has a prominent position in market sectors with strong growth potential and is well-positioned to win projects in support of a low-carbon economy.”
