Contractors have the Upper Hand
Posted on: 02/12/2014

London’s biggest contractors, such as Bam, Brookfield, Skanska and Laing O’Rourke, are being forced to reject bidding opportunities due to an overstretched workforce and lack of relevant skilled workers.

This situation has given contractors the upper hand in construction as they are able to accept work from trusted clients whom they consider as ‘low’ risk, and allowed them the choice of more profitable works. A combination of labour shortages and increasing contractor margins have sparked an increase in inflation for contractor rates over the past few months, something which has not affected demand- with contractors on average having secured 71% of their turnover for 2015- a 4% increase from the same time last year.

This report, published by Aecom, predicted that 2014 will end with 5-6% tender price inflation in the London market- forecasting similar inflation levels to be upheld until 2016. This displays the current circumstances of the market and represents a strong contrast in comparison to previous years when consultancies were experiencing dominance in the market.

However, this may be only a momentary breakthrough as there are already signs that this strong growth may be slowing with contractors only securing 26% of their work for 2016 and 9% for 2017. Whilst this golden time may be coming to a slow down after 18 months of success, at Blueprint we are optimistic that the sector will remain strong and work will be continue in strong demand.

If you are a contractor looking for work, give us a call today on 02392 603030 to see how we can help you.

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