Last week, the world’s largest mining equipment company, Caterpillar, and mining services firm, Bradken, issued profit downgrades and warned of deteriorating business conditions as the mining sector slows. Today it’s engineering and property services group, UGL, which has warned of a severe impact from the resources sector downturn. From the Age:
Engineering and property services group UGL has refrained from giving any earnings forecast for the year ahead while pointing to the severe impact of the resources sector downturn.
Operations in the ‘‘short term [are being] impacted by the downturn in the resources sector,’’ the chief executive and managing director, Mr Richard Leupen told shareholders at today’s annual general meeting.
Revenues in the engineering division are ‘‘at similar levels’’ to last year, with the outlook for the resources and engineering sectors ‘‘continuing’’ to look ‘‘difficult’’.
The Australian market ‘‘continues to be challenging’’, he told shareholders, with the focus on restraining costs along with limiting capital spending.
It’s hard to see how conditions will improve given that we are only at the start of an historical mining investment slowdown, which is likely to drag on for many years.
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