Value of jobs put out to tender dives

Aaron Morby 12 years ago
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The number of jobs coming out to tender has masked a sharp slide in the size of projects clients are releasing.

New research from market intelligence body The Builders Conference has revealed a shocking slump in the value of work that was put out to tender towards the end of last year.

It lays to rest claims that activity is holding up because the volume of new tender opportunities has not flagged significantly.

The body collected information on 8,500 contracts last year, just 2% down on 2009. But the total value of work fell 15% to £30bn over the year.

Furthermore the national average hid a slump in big jobs in many regions and a slide in the amount of work coming out towards the end of the year.

Chief executive Neil Edwards said:  “According to our findings, the number of contracts let in Oxfordshire during 2010 was actually up by 5% on the previous 12 month.

“But the combined value of those contracts was down by an incredible 69% over the same period,”

He warned: “And Oxfordshire is not unique.   The Northern region saw 21% more contracts let but a 67% fall in combined contract values.

“While there were exceptions like Scotland, Bedfordshire and Hertfordshire, it was largely the same story across the country for the full year.”

Towards of the end of 2010 both value and numbers of contracts started to slide as local authorities began to rein in spending plans ahead of budget cuts in April.

“Virtually every geographic sector showed a decline in both contracts let and contract values between the third and fourth quarter of 2010.   And some of those declines were extremely significant,” Edwards said.

“Hertfordshire saw 78% fewer contracts let in the fourth quarter when compared to the previous three months.  Worse still, the value of those contracts was 96 % down on the previous three months and 62% down on the same period in 2009.”

Edwards said that figures for the first month of 2011 show a measured but notable bounce-back. This supports recent findings of the Chartered Institute of Purchasing which also recorded a rebound in activity after the big freeze.

“While it would be premature to suggest that this is a sign of resurgence, it does highlight the resilience of an industry that is used to peaks and troughs in workload and profitability,” he added.

“But, at present, the only predictable thing about these market statistics is their sheer unpredictability.   And I fear we may still have a year or more of economic uncertainty ahead of us.”

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