Building contractors declining half of bidding opportunities, survey finds

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16th December 2015 10:26 - Construction

A recent survey from infrastructure and support services group, AECOM, has revealed that as a result of the skills shortage within London’s Building contractors declining half of bidding opportunities, survey findsconstruction companies, half are declining the bidding opportunities they receive.

According to the survey, the cost of construction has risen by around 10 per cent in 2015. As well as this, increases of seven per cent have been predicted for next year (2016), before a drop back down to 5.5 per cent in 2017.

The market research project also revealed that some of the biggest construction companies in London are now turning down three quarters of new business opportunities. It has been suggested that this is due to the increasing costs of labour within London’s construction industry.

The skills shortage has been found to have affected wages, with some joiners, who worked on London’s prime office and residential space, receiving up to 15 per cent more money in 2015.

According to Brian Smith, Director of Cost Management at AECOM:

“The industry is taking a far more strategic approach, targeting schemes that will deliver planned margins.

“Risk appetite amongst contractors is low, with a desire for certainty meaning that projects may be taken on a smaller margin if the return is guaranteed,”

It was also found that some contractors are being forced to move away from house building in London as a result of concerns about the stability of the construction market.

The AECOM research comes on the heels of Chancellor George Osborne’s campaign for more house construction, throughout the UK, over the next few years. The UK Government has suggested that it would like to increase house building in order to ease the problem of housing shortages in the United Kingdom.

According to the National House Building Council,even though there have been similar attempts at creating more homes over the last few years, the amount of new homes registered in the three months to late-September was still 2 per cent lower than that of 2014.

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