O’Rourke to suffer less than rivals from skills shortages

Grant Prior 10 years ago
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Laing O’Rourke leaders believe they will suffer less of a hit than their rivals from skills shortages thanks to a strategy of shifting production from sites to factories.

The UK’s largest private contractor confirmed its latest results today with group pre-tax profit steady at £41.9m for the year to March 31 2014 compared to £41.1m last time as turnover ticked-up slightly to £4.41bn from £4.39bn.

Chief Executive Anna Stewart said the shift to factory production left O’Rourke less exposed than rivals to construction’s skills crisis.

She said: “As the global economy picks up and project opportunities increase, the skills shortage experienced before the financial crisis will soon be felt again acutely.

“We are confident that following our strategy of Design for Manufacture and Assembly (DfMA), and transferring as many activities away from construction sites into controlled factory environments, will ensure we are less impacted by the skills shortage in traditional trades and will not be driven to engage a lower skilled and inherently less safe workforce.”

But O’Rourke is still struggling like the rest of the industry with historic jobs bid in the downturn at low margins.

Stewart said: “We expect the next two years to be challenging for our industry and for us, as we complete projects secured in recessionary times while at the same time balancing labour and material price recoveries.

“We are fortunate that we control much of the costs with our self-delivery model and are less exposed to the external supply chain, but inevitably we will all be affected by inflationary pressures.”

Stewart also predicted major reforms in the UK construction market as workloads pick-up.

She said: “We are using this period of change as a catalyst for long-overdue structural reform.

“We expect our competitors, who are showing the results of a protracted and unforgiving recession, also to be attracted to steps which make the industry a more sustainable place for high-performing participants.

“Together this could provide the momentum for permanent reform.”

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