Construction National

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Tue23102018

Last updateTue, 23 Oct 2018 9am

Hugely worrying!

Liberal Democrats leader Sir Vince Cable has described this year’s Construction News CN100 findings as “hugely worrying”.

The data revealed average pre-tax margins across the 10 largest UK contractors had fallen to -0.9 per cent (down from -0.5 per cent in last year’s analysis), whilst total debt at the 10 biggest companies had also increased by 24 per cent to £3.92bn compared with the firm’s previous financial years.

Sir Vince said that “Construction is the bellwether of the economy, so the huge debt burden and non-existent margins are hugely worrying, particularly if interest rates increase further,” and “they are signals of the economic uncertainty caused by chaotic Brexit negotiations.”

Longer Term Problems

Latest data from the Office for National Statistics (ONS) also show that total construction new orders declined 6.5% in the second quarter (April to June) of 2018. This was the third consecutive quarter of declining new orders, reaching its lowest level since the first quarter of 2013, more than five years ago.

Blane Perrotton, managing director of surveyors Naismiths, said:  “The Brexit countdown clock may have little over six months left to run, but for now the confidence-sapping lack of clarity about what a non-EU Britain will look like isn’t just slowing investment, it’s applying the handbrake.”

And Chair of the Business, Energy and Industrial Strategy committee Rachel Reeves MP, who was responsible for co-chairing the Carillion inquiry, was also concerned by the CN100’s findings, saying;

“These latest findings do raise wider concerns about the health of the construction industry. 

Ms Reeves also called on the government to do more to help the industry’s supply chain and smaller firms.

“If the government is serious about helping the construction industry, it must do more to protect small and medium sized suppliers as part of the procurement process.”

And Pigs Might Fly

Here at Streetwisesubbie.com we have long since given up on the government doing anything remotely useful or effective to support small and medium sized suppliers and Specialist Contractors. 

If you are wondering why that is just Google “Streetwisesubbie Fair Treatment” to see how much campaigning we have done in the past.

And be sure to check on our web site about how many times we have tried to galvanise support from the Trade Associations.

With the odd exception no-one wants to listen to the inconvenient truth that the Construction industry goes from bad to worse!

No surprise then that in our last survey 93.23% of the 355 Specialist Contractors who took part said that Trade Associations and government were NOT doing enough to resolve payment problems.

Lone Voices When We Need A Collective Roar

We have been banging the drum for a change in the law to protect Specialist Contractors for years. As a matter of routine, some Contractors underpay or withhold money from those lower down the food chain, and the Contractors think it is an acceptable way to do business.

As long ago as 2014, we wrote about Main Contractors who had plumbed new depths of corporate greed. That is exactly what we have seen at Carillion, and we do not doubt that we would be able to see that elsewhere if we were a fly on the wall inside a number of the worst of the Contractors.

Main Contractors who are fair and work closely with their Subcontractors are in a very small minority. There just isn’t enough fair treatment, and it is sad to see subbie’s faith in the industry being destroyed. 

Unacceptable behaviour is being driven from the top, as Contractor’s main board directors demand profits from their commercial directors and managers, who in turn put pressure on the QS’s to deliver results.  

The only people who suffer are the Subcontractors, but those representing the Specialist Contractors have failed for years to take decisive action, and the fact that the majority have not even acknowledged our calls for unity and collective action shows their apathy towards the plight of their members.

What Are We Doing To Support The Backbone Of The Industry?

We might not be able to change the economy, or make the government take action, but we can help Specialist Contractors, who are the backbone of the industry, to protect their commercial and contractual interests and future proof their business. 

In addition to the free information on our web site and our free commercial and contractual hotline* we are re-running our immensely popular seminar “Understand Your Contract to Minimise Risk and Maximise Profit - Introduction To Contractual Awareness and Using JCT Subcontracts” throughout the North of England.

The seminars are exclusively for Specialist contractors and are taking place from 16 October to 14 November at venues in Hull, Leeds, Liverpool Manchester and Newcastle. Full details are on our web site at www.streetwisesubbie.com/upcoming-events.

Specialist Contractors don't get paid because they don’t understand the contract or don’t apply it when they should. We will reveal everything they need to know to enable them to understand the fundamentals of those subcontracts, and how to get paid.    

*Subject to our terms and conditions

For more information contact: www.streetwisesubbie.com 01773 712116 This email address is being protected from spambots. You need JavaScript enabled to view it.