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Whatever happened to that recession?

Demolition: The bulls are talking the market up, the bears are talking it down. The state of the demolition industry depends on who you talk to, Ty Byrd reports

CONSENSUS is not arrived at easily in the demolition industry, at least when the subject being debated is how well the marketplace is bearing up.

Every individual asked for their opinion tells a slightly different tale. One thing all agree on, however, is that 1999 has not been the disaster in sales terms that it was feared it might be this time last year.

The recession did not happen and, despite the best endeavours of some Jeremiahs to talk the industry into a hole last year, most companies we contacted had relatively substantial workloads, even if they were not prepared to give details.

Of those willing to predict what 2000 might bring, most gave the answer 'much the same as 1999'.

The reluctance of some demolition contractors to commit themselves is perhaps understandable. Contracting, generally, is a funny old business in terms of assured continuity of work, and demolition is as vulnerable to the vagaries of the country's economic wellbeing as any other industry sector.

It is just that, being at the beginning of the production line, demolition contractors feel life's ups and downs that little bit earlier and more sharply than the others.

Still, when you are up, you are up. For instance, John Hall, managing director of Essex-based John F Hunt, believes 2000 is going to be a very good year.

'We've got a lot of major tenders coming in and we're very optimistic that we'll win our fair share,' he says.

Last year was extremely buoy-ant for Mr Hall's company, with a high level of interest being shown by commercial developers within the City of London, where John F Hunt is strong.

The residential sector has also taken off.

'A fair number of major local authority regeneration schemes are coming on stream,' Mr Hall says, 'and we've prequalified for the biggest.'

He adds: 'Matters have stabilised, everyone knows where they stand, there is no talk of recession.'

Another company based in the South-East and doing well is Squibb & Davies. General manager Paul Blanks says the company moved at the end of last year into bigger, better premises 'reflecting our year-on-year increase in turnover'.

The company neither expected nor saw a reduction in tenders coming through in 1999 and the signs are that 2000 is going to bring another increase in turnover, says Mr Blanks.

Optimism is not restricted to London and the Home Counties. Both Controlled Demolition Group, of Cleckheaton, near Leeds, and Birmingham-based DSM Midlands, confirm that their respective neighbourhoods are good places from which to operate.

'Our best year for nine years,' is how Charles Moran, managing director of Controlled Demolition, describes 1999.

He adds: 'For the first time, we've been able to match the peak of the late '80s.'

Competition is still very keen and margins have not improved, Mr Moran says.

But work is available and he believes margins will improve as clients become more discerning as a result of the CDM regulations - when prequalification lists shorten in consequence of the demand for higher standards.

One particularly good sign is the number of international inquiries.

Mr Moran says: 'We're demolishing second- and third-generation structures in the UK and have experience in complicated dismantling. This is of interest to clients overseas, where they do not have access to such knowledge locally.'

Jim Kelly, managing director of DSM Midlands, reckons his firm - perhaps the biggest of its kind in the Midlands - has had a good year in 1999.

He says turnover is up and the lead in to 2000 is 'fairly strong', with demolition of multistorey buildings, shopping centres and large industrial complexes keeping his workforce gainfully employed.

But he warns: 'Clients are having to get used to the fact that demolition is getting more costly, for reasons that include the low prices being offered for salvaged plant and scrap metals'.

Recently, DSM Midlands has been struggling to sell large overhead cranes from a major foundry dismantling job, without success. There is no longer demand for such equipment in Britain.

In addition, the value of non-ferrous metals is a fraction of what it once was, says Mr Kelly, who adds: 'As a consequence, we cannot offer clients the credits we once could.'

Other contractors were not particularly optimistic for 2000, although Keltbray, one of the busiest City-based demolition and ground remediation contractors, says it is 'quietly confident' about next year and beyond - as well it might be, having a range of framework agreements in place.

Chris Beech, of John Beech, the petrochemical dismantling specialist from the Wirral, thinks 1999 was 'an average year' and he comments on the high level of competition coming to Merseyside. 'There's a lot of people chasing a little work,' he says.

Mr Beech makes a point that is echoed by Syd Bishop, director of Syd Bishop & Sons: that modern machines and equipment plus hi-tech methods are turning demolition into a relatively rapid process.

'Buildings come down much more quickly now,' says Mr Bishop. 'The industry needs a larger volume of work to maintain continuity.'

Mr Bishop reckons workload is not constant. 'It's up and down,' he says. He rates 1999 as being good to average and believes 2000 will be pretty much the same as this year.

'I can't say the inquiries are stacked 10-foot high on my desk,' he says.

Dan Doyle, of Midlands-based Doyle Demolition & Excavation, describes 1999 as 'not brilliant' and thinks 2000 will be much the same.

Plenty of inquiries for next year are reported by Mark Davison of Newcastle upon Tyne-based MGL Demolition.

However, he fears that pricing will be as fiercely competitive as ever, and says: 'Times are getting better, but margins are far from high.'

A number of other companies were approached, although they asked not to be named.

Generally, their comments about the demolition market are gloomy, a sharp contrast to the firms that were more than happy to be quoted.

The managing director of one company says: 'Very little business planning is possible in demolition, comparatively little notice is given of new work and the lead times are very short.'

'You have to be very alert to the possibility of new jobs, clever with your tenders, persuasive in selling your services and, most of all, lucky.'

He is pleased to have survived another year and, when pressed for his opinion, says that 2000 'might not be too bad'.