Rotary piling (staying level) reported no change as lead times remained at five weeks. Although enquiries generally reduce leading up to Christmas, this year they have remained unchanged, maintaining the lead time. One company reported that the mobilisation period could extend to two weeks, depending on allocation of piling rigs and also on when orders were received.
Concrete works (staying level) remain at nine weeks, although how the figures are reported has been changed. Previously many companies identified both procurement and manufacture periods for the concrete supply chain. Typically the manufacture period identified the reinforcement procurement. This period has now been incorporated into a longer procurement period as there are no items manufactured in house to enable site operations to commence.
Steelwork (going up) increased from 10 to 11 weeks, as companies remained busier with new enquiries than in the last six months. Pressure on design offices caused the increase and companies advise that there are not enough steelwork designers in the market to ease the problem.
Membrane roofing (going up) increased by one week back to the previous lead time of seven weeks. All companies are busy with new enquiries and although last time materials were widely available, some manufacturers are now finding it difficult to meet the new Part L regulations.
High demand for brickwork (going up) increased lead times to six weeks (+1). Although there is the highest number of trainees for four years, significant numbers of projects have meant firms are quoting extra mobilisation periods.
Drylining (staying level) companies report no changes from nine weeks. Mobilisation periods have increased to two weeks. Recent supply problems have improved and scheduling new projects into resource levels remains the only fluctuating factor affecting lead times at present.
There was a mixed response in the demountable partition (staying level) sector. Some companies are very busy, notably those working in Europe, whereas other firms report workload has dropped, particularly in London. Overall the lead time remains at seven weeks. Design periods have reduced due to workloads and although manufacture has increased, suppliers foresee no serious problems.
General joinery (going down) suppliers reduced lead times to 11 weeks (-2). Enquiries are at a lower level than before and projects are now on site, reducing design periods.
Specialist joinery (going down) companies note a slow down in new enquiries as lead times reduce by a further week to 14 weeks overall. Design offices are less pressured and most companies are able to accommodate new orders. All materials are generally available.
The raised floor (going down) sector reduced lead-in forecasts back to six weeks as manufacturing plants have spare capacity. Generally new enquiries have slowed over the last six months.
Suspended ceilings (going up) increased by one week to 15 weeks, as labour availability remains the key issue. New enquiries have been slowing and suppliers expect lead times to level next time.
Lifts (staying level) remain at 41 weeks and though fitters continue to be in high demand, enquiries remain at a satisfactory level.
Suppliers report that several mechanical contracts (going down) have been pushed back in the last month creating capacity in design offices, leading to a drop in lead times of one week to 17 overall. Companies expect capacity to be available through the next year, as new enquiries are also reduced compared with earlier in the year.
Following the previous drop to 15 weeks, ductwork (staying level) companies do not report any further reduction in lead times, although new enquiries are at lower levels.
Companies are generally reporting slowing of markets relative to the workloads of the previous year. Fit-out companies have tended to be the ones noting fewer new enquiries while services suppliers note some projects being postponed. Despite all of the downward trends, most companies continue to quote labour sourcing problems.
Lead time tables
Going upSteelwork
Membrane roofing
Brickwork
Suspended ceilings Staying level
Rotary piling
Concrete works
Drylining
Lifts
Ductwork
Demountable partition Going down
Mechanical contracts
Specialist joinery
General joinery
Raised floors
Lead times
Lead times have remained at an average five weeks for both precast and rotary piling, for two consecutive quarters. The few piling contractors reporting lead times closer to six weeks acknowledged that five weeks is achievable if their equipment flows through the yard properly. This period of apparently consistent lead times masks a brief spell during the summer, between 好色先生TV鈥檚 Lead times surveys, when particularly high demand caused lead times to increase to nine weeks. Some piling contractors say they can manage a three- to four-week lead time for small projects. The forecast for next year suggests a continuation of five weeks, with reducing levels of activity within the sector expected to alleviate any upward pressure on lead times.Enquiry levels
It is universally held by major piling contractors that the sector has enjoyed a particularly buoyant market for the past two years. However, enquiries, which remained strong up to the end of the second quarter this year, have slowed significantly over the third quarter, prompting suggestions of a decline in the market overall. But one major piling contractor took a more positive stance, commenting: 鈥淲e certainly shouldn鈥檛 look at the current situation as a slowdown of the market 鈥� it is simply getting us back on track following two outstanding years.鈥� Others support this view and consider the levels of enquiries and workload experienced through 2000 and 2001 to be unsustainable. One of the UK鈥檚 leading piling contractors observed: 鈥淭his time last year we were turning work away, and not simply being selective 鈥� there was just more work available than we could cope with. That situation has now eased somewhat.鈥� Although some piling contractors are still able to be selective in work tendered, there are noticeably fewer opportunities about. Typically, one or two large projects have made up the majority of a piling contractor鈥檚 workload at any time, with smaller projects providing a base flow of work. The present situation is witnessing the continuation of the smaller base workflow projects, but with fewer major schemes. Notwithstanding this apparent quietening down, the longer-term view remains fairly positive, with many piling contractors reporting enquiries for work next year and some with contracts extending into 2004. One observed: 鈥淲e presently have tenders of 拢4m being reviewed and contracts worth 拢10m at pre-tender stage.鈥�Tender prices
Over recent years, tenders for piling work have seen an increase in contractor-led design, with piling contractors often being brought in at the feasibility stage of a project. This scenario has also led to a demand for higher levels of professional indemnity insurance, as one of the UK鈥檚 leading piling contractors observed: 鈥淢any clients have asked us to increase our PI insurance from 拢5m to 拢10m; this is increasing our premiums significantly and these costs have to be passed on in increased tender prices.鈥� They added that although risks have not changed there is a tendency to pass risk down the line, for example passing the risks for a 拢40m building to a piling contractor who has a 拢500,000 contract. Tender prices for piling work have increased steadily during the past few years, with the sector enjoying a boom period and many piling contractors unable to fulfil demand. According to one of the larger piling contractors the growth in the market has spawned 鈥渁 large number of new second-tier and third-tier piling contractors who operate with very low overheads and, sadly, little experience. Whilst these contractors are able to tender at very competitive levels, there is a tendency for them to be somewhat transient.鈥� Materials price increases have remained relatively low over the past few years, keeping tender price increases down to about 2.5% per annum for the last two years. Forecasts for 2003 suggest a similar increase.Orders and workload
Piling sector output for 2002 seems set to show an increase for the third consecutive year, boosted by a handful of major projects, including the Channel Tunnel Rail Link. Piling output in the third quarter of this year was the highest of any quarter for 18 months. Although most of the CTRL contracts are now let, there are other large projects still in the pipeline. A 拢12m piling contract was recently tendered for the Wembley stadium redevelopment. Output in the construction industry as a whole rose 3.5% in 2001, outpacing growth in the UK economy for the first time since 1989. Output growth has continued at an even faster pace this year, with the growth rate for new work doubling and repairs and maintenance growth declining. At present, order levels are holding up well against a decreasing base of enquiries. However, a slight slowdown in enquiries in the second half of this year is likely to be carried through to output. As there is typically an eight- to 12-week lag between enquiries and orders, the fourth quarter of this year is not expected to show the same growth as the third quarter. There is no published forecasting data for piling output but a slight slowdown is predicted for 2003, partly because of the easing of demand in the commercial sector. This is not to say that the market will reduce, but rather that the rate of growth will lessen. The Forecasting Committee for the Construction Industries predicts construction output growth of 3.8% in 2003, although this healthy figure conceals an anticipated decline in orders for private commercial work. Few piling contractors report any significant labour shortages. Many companies directly employ and train their own rig operators, supplementing peripheral labour with a temporary workforce as required. Mark Kliner, the area director of Stent Piling, advised: 鈥淎ll our workforce is directly employed. We have been investing heavily in the training and development of our existing workforce, particularly in providing them with new skills.鈥� This has won Stent a quality in construction training award, and they believe that multiskilling of staff has and will continue to offer many benefits. Other piling contractors are also concentrating on graduate recruitment and training programmes to attract new people, both skilled and professional, into the industry. Increases in operating efficiency and improvements in performance are being achieved by piling contractors measuring and acting upon key performance indicators. Many piling contractors have taken advantage of recent boom output levels to invest in replacement piling rigs and other plant. To remain at the forefront of technological developments the top piling contractors will write off piling rigs every three to five years, as manufacturers improve specifications. Smaller piling contractors may keep plant in use for as long as 10 to 15 years. But as one piling contractor succinctly put it: 鈥淜eeping our plant up to date costs us less than having older rigs breaking down on site, which would lose us time and severely damage our reputation.鈥�Downloads
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