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Prices down and costs up

There were lots of stories of how much tender prices have fallen during the downturn, and the amount of ‘suicide bidding’.

Most contractors had experienced putting in tenders at very thin margins only to be beaten by more than 10 per cent.

At the time costs continue to rise, at least in materials (labour rates are still falling). Forty-one per cent of companies in our poll said that materials price rises were a
major headache. And it is not just the price rises but the fact they are more difficult to predict - companies are less and less willing to price based on what costs might be in three or four months time.

Ian Jordan “For jobs a way off into the future, we put in a estimate for increased cost. But in reality it is not much more than a guess.”

Steven Hale “The loss some firms incur on making people redundant is more than bidding below cost for work to keep them busy.”

Colin Brooks “We had a client that asked us to quote on 2005 material prices (even though they’ve gone up) so in practice it was a 10 per cent price reduction and we just had to swallow our pride on that.”

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