There can be little doubt that the prolonged difficulties besetting the construction industry have had a dramatic effect on the natural order of things.
It would seem that the rewards and benefits of managing successful, prudent and innovative specialist businesses are being seriously eroded by increased main contractor competitiveness. This in turn limits the numbers of specialist contractors who are able to support them in their bidding process.
Worrying trend leads to specialists missing out
A particular concern is the worrying increase in some main contractors’ willingness to procure specialist façade and roofing materials directly from system manufacturers and then employing design and installation labour to undertake the works for them.
This diminishes the strength and importance of experienced, established and capable specialist contractors that have achieved success in this historically difficult sector.
“It won’t take many noticeable project failures to illustrate a flawed process, but the concern is that specialists’ investment will continue to be unrewarded”
Not all blame can be put at the contractors’ door for this worrying trend, however.
Credit insurance companies’ reluctance to sustain their levels of exposure to all things construction has had a huge detrimental effect on many suppliers’ routes to market, often bringing very sudden reductions of their established and potential customer lists and, as a consequence, market opportunities.
This has been especially felt by those suppliers whose unrecoverable debt experience and their resultant weakened balance sheets over the past five years precludes trading at risk with uninsured customers, no matter how long and close the business relationship.
Faced with limited or non-existent credit insurance cover for many of their customers, suppliers will inevitably respond to these main contractor initiatives to sustain their route to market.
Specialist contractors offer long-term benefits
Despite these short-term mutual benefits, there are significant consequences that must be addressed for the notoriously challenging building façade sector.
There is the risk that some main contractors will underestimate the administrative detail and complexity in the façade material procurement process, perhaps relying entirely on the limited resource and low accountability of the design and installation company.
Similarly, suppliers may experience expensive changes in their ordering processes and soon recognise the increased need for closer diligence in their dealings with main contractor buyers that are inexperienced in façade component procurement.
In contrast, the more established and secure specialist contractor can offer both technical experience and a collaborative relationship to eliminate risk, audit time scales and recognise innovative solutions within the façade construction.
In the future, it won’t take many noticeable project failures to illustrate a flawed process. Meanwhile the concern is that the investment by companies such as Lakesmere will continue to be unrewarded.
Brent Tyrell is business development manager at Lakesmere