M&E Contract News – Summer Rush Eases as Rates Stay High!

Despite all the political upheaval courtesy of Brexit, hung parliaments and even talk of a ‘New Party’ in politics, the construction industry remained buoyant in the summer, despite definite signs that the commercial market is slowing down, at least with some of my clients.

The biggest issue I have witnessed has been the increase in demand and how that it has offered electricians rates averaging out at £20.00 an hour (more in London). This is all well and good if the quality of the labour is a reflection of these costs but whilst electricians are not to particularly hard to come by, quality isn’t and end client costs in excess of a thousand pounds a week (per man) can be very difficult to control.

We have recently been supplying management and trades staff to Brunel University (Above).

What I have noticed over the years is that it is at times like these when companies get caught out by a combination of escalating rates, poor labour and no fat left from the original tender price. Lets not forget that at the start of 2016, contract/agency labour costs were 25% lower than what they are now; that is a massive burden to clients who were tendering at that time and some fingers will inevitably get burnt.

It is pretty obvious that we are heading into a period where work will start cooling off because of economical and seasonal changes and that may just give everyone a window of opportunity to pause for breath and assess costs. No one wants to see companies go to the wall because of drastic and unforeseen economic changes.

What no one really knows is whether the relatively buoyant market place has been driven by a pre-Brexit rush to invest or whether Britain is resilient to whatever economic questions get asked of us. I guess what is disturbing is that those overseeing the process don’t appear to know what they are doing and why would they when we have never experienced anything like it before?

Hopefully, by the time the autumn is out, there will be more certainty about deals with our neighbours and everyone can get on with their lives and enjoys the fruits of their resilience despite the apparent ineptitude at the top of government.

Either that or Boris will have another Machiavellian turn and we will have to endure the pain of yet another leadership campaign and general election.

Perish the thought.