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More sub-contractors working at reduced capacity

Less than half of specialist contractors are operating at more than 75 per cent capacity, according to a new specialist contractors survey.

The National Specialist Contractors’ Council State of Trade survey for the first quarter of 2011 revealed that despite an increase in enquiries, there was a reduction in firms operating at three-quarter capacity from 62 to 47 per cent.

NSCC chief executive Suzannah Nichol said: “The continued rise in supplier prices is putting the squeeze on specialist contractors. While more respondents are saying that they expect an increase in workload, this could be due to the desperately low levels of work available at the moment with businesses anticipating that it can only get better.”

The survey found:

  • The percentage of specialist contractors reporting over 90 per cent capacity workload fell to 20 per cent from 35 per cent in the previous quarter.
  • 39 per cent reported an increase in enquiries and 37 per cent reported an increase in orders, while 29 per cent reported a decrease in enquiries and 35 per cent reported a decrease in orders.
  • The percentage reporting more difficulty in recruiting skilled labour decreased from 10 to 8 per cent, while 19 per cent found it less difficult to recruit.
  • 60 per cent of respondents anticipated falling margins with 11 per cent anticipating increasing margins.

With almost half of specialist contractors surveyed expecting an increase in workload, there will be a renewed focus on skills as businesses look to make sure they have a qualified workforce in place to deliver new projects.

Almost 40 per cent of firms said they were planning to recruit an apprentice in the coming year and NSCC will be recognising those that invest in apprenticeships with the new NSCC Roll of Honour.

More than half the contractors surveyed reported falling tender prices while almost one in five reported increasing prices.

Almost 90 per cent of respondents reported increases in suppliers prices compared to 74 per cent in the last quarter.

The vast majority of firms (77 per cent) were being paid between 30 and 60 days while 7 per cent were paid within 30 days and 16 per cent were waiting more than 60 days.

The survey also found that 83 per cent of respondents had monies withheld against them in retentions and 35 per cent of retention monies were overdue for release.

On average, 17 per cent of outstanding retentions were written off as bad debts and 17 per cent of companies had used a retention bond as an alternative to cash retention.

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