Consultant says clients realising seriousness of situation and working with firms in more ‘collaborative’ way

Consultant Rider Levett Bucknall is warning that margins are being squeezed as new orders fall.

The firm’s latest sentiment survey said workloads for contractors and subcontractors was being worded because of fewer new starts – as nervous clients take longer to get going in the face of affordability issues.

In its report for Q2, the firm said: “Projects on the way to completion need to be replaced, but in overall terms that appears not to be happening at sufficient levels. Consequently, the tightening of margins is continuing, increasing insolvency concerns.”

cranes

Source: Shutterstock

Clients are starting to realise the seriousness of the impact of falling margins on firms, RLB said

New orders fell by 16% last year, according to the ONS with private industrial and warehouse work particularly affected.

But RLB said the penny was dropping with some clients that contractors were facing tougher times.

“There are signs that clients are aware of the difficult trading conditions facing contractors and are now willing to work more collaboratively with them,” it added.

The firm said it expected tender price rises to be slightly higher in the second quarter at 3.38% compared to 3.19% for the first three months of the year.

Topics