A survey by Constructiononline has revealed that almost 9 out of 10 contractors are facing tender competition by rival firms who are putting tenders in at below cost.
The survey from over 600 firms revealed that 88% of firms had tendered for work against competition ‘suicide bidders’. The statistics shows just how much the UK construction industry is struggling in the recession and more needs to be done to stimulate growth and work.
The survey also revealed that late payments are becoming more frequent with only 2% of businesses showing a speeding up of payment. Recipro has previously reported on the problems contractors face with late payments.
Philip Prince, Sales and Marketing Director at Constructionline, said: “The survey shows one clear result of the difficult market conditions, plus the resultant pain for suppliers. Payment terms is a big issue and can be seen from the likes of the NSCC Fair Payment campaign.
There is evidence of action being taken at the client side, for example central government’s commitment to fair payment practices, but our survey shows more needs to be done.
According to ONS data, the construction workforce has dipped to its lowest level since 2001, losing many skilled and trained workers as a result. To ensure that our industry doesn’t face a skills shortage, clients need to focus support, particularly for SMEs. Stricter rules on payment times and agreeing contract terms before delivering orders would help.
We know that construction procurement can be an onerous process for both buyers and suppliers. This is why reducing the burden of pre-qualification (PQQ) in the construction industry is Constructionline’s top priority. By working with buyers and suppliers to promote better buying practices and removing PQQ duplication, we hope to continue saving buyers and suppliers time and money, as well as improving efficiency in order to get the industry moving.”
Recipro sourced this article from Construction Enquirer.