Economic crime hits 40% of construction firms

Economic crime is hitting construction companies harder, with 40% suffering from some form of theft, embezzlement, corruption, bribery, money-laundering and intellectual property infringment.

The figure comes as part of a survey of 321 companies in 40 countries by PricewaterhouseCoopers.

The problem of corruption and bribery was particularly bad in eastern Europe, the survey found, where 41% of respondents admitted to having been asked to pay a bribe.

But western Europe did not escape unscathed either. The report found that western European construction firms suffered an average financial loss of more than £5m over the last two years. The overall average was £1.5m.

Theft of supplies, cash and equipment was the most reported type of crime, with 27% of companies reporting that they had suffered from it.

But PwC said it was also surprised by the level of intellectual property theft, including the copying of designs and specifications for specialised equipment, plant and process technology. Western European firms lost an average of almost £6.5m to this type of crime.

PwC global engineering and construction leader Jonathan Hook said: "In the current climate, with low margins and intense competition in the sector, committing economic crime may be more tempting.

"Despite this only 10% of respondents surveyed expect that their company will be a victim of any form of economic crime in the next two years. This appears somewhat unrealistic."