Government cuts to hold back SIG

17th Mar 2011 07:10

Construction products supplier SIG posted higher profits in 2010 as it recovered from the economic downturn following the 2008-09 global crash, but warned that government cuts will counteract private sector growth this year.SIG, which supplies materials for insulation, roofing and other areas of construction, posted an underlying pre-tax profit of £62.5m for the period, up 3.1% from the previous year, on revenues that slipped 2% to £2.67bn.SIG was hit by bad weather at either end of 2010 and described the pattern of recovery as uneven in different markets. Britain, France and Germany, SIG's major markets, saw residential construction levels improve from a low base.While revenues were lower over the full year, SIG said that the second half saw an improvement from the same period the previous year."The board expects to see 2010's modest growth trend in residential building continuing in 2011 and the decline in private non-residential construction levelling out in H1 2011," said chairman Leslie Van de Walle."However, government expenditure cuts are expected to cause public sector new construction activity to decline as the year progresses, counteracting mild growth in the private sector, particularly in the UK."Trading in the first two months of 2011 was in line with expectations and much better than the same period last year, much of which was affected by extreme winter weather.