An interesting article in Construction News (Nov 2012) cited the downward trend in the construction sector continued in September. Official figures reveal a 13% drop from a year ago.
Steve McGuckin, UK managing director of Turner & Townsend (Project Managers), is cited as saying that this decline is a serious worry.
“As the big players are being forced to pitch for smaller projects, those in the ‘squeezed middle’ are having to slash margins to negligible levels – and in the most extreme cases, some firms are pitching for work at below cost, simply to keep cash-flow coming in. Such desperate measures are clearly unsustainable, and the industry as a whole is having to adapt to a tough environment which is still showing no sign of improving. With construction slipping from no growth to painful contraction, even stagnation is starting to look attractive.”
This makes it even more important that clients use the services of an independent consultant to protect their interests during construction projects. The risk of contractors becoming insolvent before completing their project is greater now than at any time in the past 20 years. The project manager provides a degree of protection for the client by ensuring that works are carried out to the agreed specification and that contractor payments are justified.