Contractors involved in bigger and fewer deals

Mergers and acquisitions involving UK contractors fell in number but increased in value over the past 12 months, according a PricewaterhouseCoopers report.

The report into mergers and acquisition activity in the year to March 2007 found deals increased at an average of 30% per year in value for the past four years, while volumes halved from an average of 50 to 25.

The report, which pointed to renewed interest in the construction industry, also predicted that construction firms were on the cusp of a "step-change" in profit, up from the traditional 2% margin.

It said: "Generally, the UK construction industry is grappling with a full orderbook. This, coupled with an acute skills shortage and cost inflation in the materials sector, means that it has never been more important for contractors to price work fully."