Labour Shortage A Worry For Specialists
SHORTAGES of labour and materials are concerns expressed in the latest state of trade survey from the NSCC (National Specialist Contractors’ Council), of which the CFA (Contract Flooring Association) is affiliated.
Covering the third quarter of 2014, the survey notes that higher demand is putting increased pressure on an already overstretched workforce employed by specialist sub-contractors, including those in flooring.
Although many specialist contractors are reportedly benefitting from increased workloads and rising tender prices, there are issues causing concern.
Shortages: In particular, the upturn in the market has contributed to shortages of materials, as well as labour, which is having an impact on specialist contractors’ ability to bid.
Nearly half are finding it more difficult to recruit skilled labour, and the balance of recruitment difficulty (the difference between respondents reporting more and less difficulty) has reached a 10-year high.
Unable to bid for work: Some 17% of respondents stated that they are unable to bid for work because of these skills shortages and, as a result, tender prices are on the rise with just 11% of specialist contractors seeing a decrease in prices last quarter, the lowest figure since 2007.
Enquiries: Meanwhile, enquiries in the specialist sector are at their highest for more than 15 years and this is translating into increased work with 47% reporting an increase in orders.
Margins: Despite 26% reporting shrinking margins 17% say their margins are actually improving, the highest number since 2007.
Anticipated workload: There is a significant improvement in anticipated workload over the next quarter, with 41% expecting more work. This is below the five-year average but in line with the results from this time last year.
Late payment: This continues to be an issue for specialist contractors with 24% reporting that it is still taking over 60 days for them to be paid, the highest figure in almost six years.
Retentions: A total of 87% of respondents have retentions withheld, at an average of £106,506 each.
An average of £19,031 for each specialist is overdue for release. Around 15% of outstanding retentions have to be written off as bad debts.
And 12% of specialist contractors have used a retention bond as an alternative to cash retention.
With a quarter of specialist contractors looking to grow their businesses by the end of 2014 and more than half planning expansion over the next year, training and upskilling in the industry is becoming increasingly vital.
NSCC chief executive Suzannah Nichol said:
‘Investment in training is crucial if the industry is to meet demand and support growth in the UK economy.
‘By facilitating apprenticeships and upskilling the workforce, we can ensure a sustainable future workforce and the industry will be able to maximise opportunities that an improving market now presents.’
NSCC contributes its findings to the State of Trade Survey published by the Construction Products Association, enabling the experiences of the specialist sector to be compared with the wider industry.
This article has been reproduced from the Contract Flooring Journal. You can find them at www.contractflooringjournal.co.uk.