With construction output picking up in the second half of 2013 the construction upturn brings with it certain risks for projects. Contractors are already experiencing shortages and long lead-in times particularly for bricks and blocks.
The reason is no doubt because of reductions in stocks and factory outputs over the last few years.During the recession, brickworks closed down and were mothballed and manufacturers did the same with blocks and roof tiles. With the sharp construction upturn, particularly due to the housebuilders reacting to demand from the property market, many suppliers have been unable to satisfy the demands of their building contractor clients. A similar story will be seen in other parts of the industry too as the economy picks up and companies that had cut their overheads and reduced their staff levels to suit depressed levels of demand cannot meet new demand.
Past stories of bricklayers going down the road to another site for a better price may be about to be a reality again. There is no doubt that sub-contractors will be getting more selective over the jobs they take on. With already tight margins, contractors may find it difficult to maintain their labour levels on site in such circumstances.
So, as a Client or Consultant, what can be done? Here are some suggestions:-
1) Check pricing levels of tenders and query if elements appear low compared to other tenders as it may indicate an unreliable supplier or subcontractor.
2) Check contractors programmes and query lead in times and resource allocations.
3) Query lead in times for instructed works. Give instructions and make choices in a timely manner.
4) Check and query labour levels and materials supplies if elements of the works on site appear to have slowed.