Hudson Contract clients fear the ‘Carillion factor’ more than Brexit

Hudson Contract clients fear the ‘Carillion factor’ more than Brexit

12th February 2019 | Hudson Contract

Views from around the regions

Hudson Contract’s account management team visits hundreds of businesses every month, giving us – and you – an up-to-the-moment overview of what’s happening at the sharp end of construction.

And while the industry’s big boys are focused on their Brexit contingency plans right now, the average firm is far more concerned about getting caught up in another Carillion or Forrest collapse.

With the news breaking that suppliers and subbies are now expected to lose all of the £24.6 million owed by collapsed contractor Forrest causing dismay across the North-West in particular, many of our clients are reviewing their own client lists – the Carillion effect has become an important consideration when tendering for business, and a key trend of firms in the northern half of the country is to cherry pick who they choose work for. 

Business at any price – it’s not worth having

In short, national contractors are being shunned in favour of looking at projects that might be less profitable, but where there is every likelihood of being paid on time and at the agreed price.  Whereas those who ask for a price to be ‘value engineered’ – reduced – after it has been agreed are likely to be avoided. 

In short, Hudson Contract clients are becoming more selective than they used to be.

Housebuilding slowdown across the Midlands

In the Midlands, firms working on new builds report that after a hectic few months, the pace is slowing down and next phases are being held back.  It’s a trend that stretches from Birmingham to Cambridge via Northampton and Milton Keynes and housebuilders are mothballing sites saying they believe ongoing uncertainty about Brexit is putting off buyers.

Further south, and particularly in London and the South-East, the shortage of skilled labour is still an issue, with many fearing a further exodus of EU nationals in April.

Client confidence remains high

Despite the regional house building contraction, our clients generally say they are busy and actively tendering for business, picking and choosing their projects with care.  Many have also decided that expanding their own businesses is not currently a priority, and that they prefer to look to freelance builders to deliver extra resource as and when necessary.

On the horizon

The changes to VAT, coming in October, are causing concern and confusion, with further details yet to be announced.  Hudson Contract will make sure you’re up-to-speed once more is known.

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