Civils firms struggle as materials cost rises bite

Aaron Morby 12 years ago
Share

Civil engineering contractors are battling with rising costs amid continued falls in tender prices.

Tender prices for both new work and repair and maintenance have been falling for over two years and as cost pressures intensify profit margins have reduced even further raising the risk of firms going to the wall, according to the first trade survey in 2011 by the Civil Engineering Contractors Association.

Across the three nations, Scottish firms reported the worst workload balances, with over half of the responses indicating that workloads fell compared with a year ago.

Overall, 24% of Welsh firms who responded, and 18% of English firms that did so, reported a decline in workload in the final quarter of 2010.

But looking forward civil engineering firms are optimistic that new orders will stat to rise over the coming 12 months.

Survey results

24 % reported a higher workload than 12 months ago

44% reported a lower workload than 12 months ago

78 % reported that costs were higher than 12 months ago

CECA director of external affairs Alasdair Reisner said: “Having now experienced a long period where the outlook for contractors has been negative, we always anticipated that the downward trend could not continue forever.

“We are heartened by the slight improvement in the balances for workload and order, but we must remember the figures remain negative: this is not the growth the industry needs.

“The positive order books are in areas of private investment in infrastructure, something that must happen if the industry is to replace lost public sector work. But we would like to see this sustained in the longer term before we start talking about recovery.

“In the short term, we remain extremely worried that tender prices continues to fall while our members’ costs are rising. This is an unhealthy situation for the industry.”

Latest news

Construction Manager of the Year crowned

Kier's Joe O’Connell lands top prize. Full list of winners
5 hours ago

Construction arm propels Mace to record profit

Revenue expected to top £2bn this year despite project delays
1 day ago

Fire destroys conveyor belt at Silvertown Tunnel site

Forty firefighters battle blaze at huge London site
18 hours ago

Social housing bidding opens for £1.5bn energy retrofit cash

First upgrades of social housing stock could start from early next year
8 hours ago

Plan for £58m Bristol pharma R&D facility approved

Willmott Dixon in line to build the R&D facility at Bristol & Bath Science Park
9 hours ago

Bond Street Elizabeth line station to open next month

Final station on delayed line will welcome passengers in October
9 hours ago

Sisk fixes price on £227m Quintain flats job

Quintain signs single-largest contract so far at Wembley Park
1 day ago

Green light for St Helens town centre revamp

English Cities Fund to start phase 1 next April
10 hours ago

Rising costs tip William Hare to £3.6m loss

Specialist contractor falls into the red despite near 60% revenue rise to £220m
2 days ago

Safety blitz on “aches, pains and strains” on site

1,000 site visits planned in coming months to check how workers are moving heavy or bulky materials
2 days ago

Drones sent flying underground to check sewers

Traditional inspection teams replaced with latest technology
1 day ago

Plan submitted for 470 Preston flats scheme

Stoneygate Central scheme on Dryden Mill site will rise to 16 storeys
1 day ago

Graham starts £124m M25 Junction 28

Work on the 36-month Junction 28 upgrade includes constructing a major two-lane loop road
1 day ago

Keltbray bags brace of energy infrastructure wins

Civils work on huge converter stations worth £30m to specialist
2 days ago

Balfour Beatty sole winner for £4bn Scape civils deals

Contractor reappointed to England, Wales and Northern Ireland and separate Scottish deals
2 days ago

PR expert Baroness Rock to chair Costain

Kate Rock will take up senior board role at the end of the year
2 days ago

Billington profit upgrade after strong first-half

Steelwork contractor says weaker pound will allow it to reignite its old export markets in Europe
2 days ago

Green light for £120m Liverpool “super restaurant”

Historic Pumphouse at Stanley Dock to be transformed
3 days ago

Tolent bags £15m Sunderland skills academy

Work to start later this year on Housing Innovation and Construction Skills Academy
2 days ago

Government launches net zero review

Pro-growth and pro-business review of net zero 2050 target launches
3 days ago

L&G Modular wins 400-home Wolverhampton job

Modular specialist wins 17-acre Canalside South regeneration scheme
3 days ago

£1.2bn A12 upgrade accepted for planning

15-mile Essex road upgrade between Chelmsford and Colchester aims for 2023/24 start
3 days ago

US consultant trumps WSP bid for RPS Group

Tetra Tech swoops but WSP could come back with new offer if bidding war breaks out
3 days ago

Sisk hands staff £900 cost of living cash boost

Firm also promises staff £400 Christmas voucher in November
3 days ago

Loathed IR35 reforms scrapped by Chancellor

Contractors will no longer have to determine tax status of freelance workers
6 days ago

Higgins signs deal for 740 West London homes

Work to start this autumn on two Hayes housing estate rebuilds
3 days ago

Kier wins Sefton net zero £36m school job

Deyes High School in Maghull will consist of 60 classrooms
3 days ago

Giant TBM cutterhead takes road trip to second drive

Balfour Beatty Vinci to drag remaining TBM back through tunnel for second bore
6 days ago

Fast-track 138-project growth plan – full list

Chancellor banks on road projects to lead growth plan recover
6 days ago

Kwarteng backs construction to lead “new era for Britain”

Planning rules to be ripped-up to speed infrastructure work as 38 new Investment Zones created
7 days ago

Contractor services