Contractors report increasing tender prices

UK: An increasing number of specialist contractors within the construction industry are reporting increased tender prices.

The latest state of trade survey by the The National Specialist Contractors Council (NSCC) reveals that the number of specialist contractors benefiting from increased tender prices is at its highest for eight years.

Figures for the fourth quarter of 2014 reveal that 44% of specialist contractors have increased tender prices compared to just 11% who decreased prices in the same period. The balance of tender prices, which is the difference between respondents reporting an increase and a decrease in prices, is said to be the highest since the pre-recession days of late 2006. This has been driven by a combination of increased demand and the rising cost of materials, with 82% of specialist contractors reporting an increase in suppliers’ prices in the last quarter.

The NSCC represents 31 specialist trade organisations within the construction industry including the Association of Ductwork Contractors and Allied Services (ADCAS) and the Catering Equipment Distributors Association (CEDA).

The latest figures reflect a growing upturn in the sector. Last week the Building and Engineering Services Contractors’ Association reported increases in workload and turnover in the UK. The latest NSCC report reflects this with eight out of 10 specialist contractors reporting that they are working at over 75% capacity with almost half at over 90% capacity. Capacity levels look set to be maintained over the next year with more than half of respondents anticipating that their workload will increase during this period.

However, continued growth within the industry could be undermined by skills shortages with 43% of specialist contractors reporting more difficulty in recruiting skilled labour in the last quarter. The balance of recruitment difficulty remains at its highest level for 10 years. Late payment also remains an issue with 20% waiting on average more than 60 days to get paid.

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