Morgan Sindall: marketplace has become 'increasingly challenging'

Morgan Sindall has warned that its 2009 results are expected to be hit by a slowing residential and commerical market.

It said that conditions in the sectors had become "increasingly challenging" over the last quarter.

Its order book has stayed at around £4.3bn since the start of the year, with average cash balances year to date at £95m.

"We remain on track for 2008 although the prolonged slow down in the commercial property and open market housing sectors will impact our expectations for 2009," the company said in a trading update.

The company said that its affordable housing division was experiencing a tougher market and would switch its focus to new build social housing, as well as switching units designated for open market sale to social housing.

Meanwhile it was more up beat about general construction, which has traded in line with expectations for the first half of the year. Stronger public sector spending, particularly within education, had gone some way to offsetting weaker demand in commercial property, it said.

The gloomy assessment of 2009 issued this morning follows a warning from Morgan Sindall's executive chairman at a shareholders' meeting in April that "any prolonged slowdown in certain sectors may impact 2009 and beyond".