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Signs of stabilisation in the specialist sector

Subcontractors have rep orted an increase in enquiries, orders and anticipated workloads according to the latest NSCC state of trade survey, suggesting the specialist sector may
be stabilising.

The results from the National Specialist Contractors Council survey for the first quarter of 2010 show that enquiries have risen by 9 per cent and orders by 18 per cent compared to the previous quarter.

This has led to a 17 per cent rise in the number of subcontractors predicting an increase in workload compared to this time last year.

Suppliers’ prices have risen for the third successive quarter, with 62 per cent of subcontractors reporting an increase in prices compared to 33 per cent in September 2009.

However, there has been almost no movement in tender prices during the same period, with only 3 per cent of respondents reporting an increase this quarter, placing more pressure
on already tight margins.

This is exacerbated by poor payment practices, the survey showing that 96 per cent of
subcontractors are waiting longer than 30 days for payment.

A member of the Association of Interior Specialists responding to the survey said that “payment periods are the worst they have been in our 13 years of trading”.

The Government has committed to making payment within 30 days a contractual requirement in the public sector from April 2010.

The NSCC survey showed 40 per cent of monies withheld in retention from respondents were overdue for release, with almost one-fifth ultimately written off as bad debts.

There is continued nervousness regarding the financial stability of clients and restricted lending from banks and this is affecting capacity and expansion plans, with only 52 per cent of subcontractors currently working at over 75 per cent capacity.

The NSCC state of trade survey brings together the views of the members of 31 different specialist trade associations within the construction industry.

It has led a campaign for fair payment for specialist contractors, as well as various safety initiatives.