Calm before the storm…….

I don’t know about you but we’ve been rushed off our feet since we came back after the Christmas break and things have only really just slowed down for us – producing boq’s for contractors that is. Time to draw breath we think. Conversely our Consultancy site based QS services has been at a low level of activity for quite a while now, everyone getting by the best way they can.

But is it just me, or is there something in the air………things are about to get more, dare I say sinister this year?

Buildings headline news of insolvencies being down in January compared to last year is more optimistic news – sad news for those 205 companies and all their employees mind, not a great start to the New Year for them.

But I think things are about to take a turn for the worse…….. (and I’m not the only one, take a look at Neil Edwards blog for some words of warning too)

Now I normally look on the bright side when I can, but I can hear too many alarm bells starting to ring now, meaning it’s going to get tough and nasty for us all. And soon.

Fuel prices, raw material prices, interest rates, extended payment periods, government spending cuts, increases in national insurance contributions….I feel like I could go on ……the thing is nothing is going to get any cheaper.

Where is the pressure for everyone?

To reduce costs, and we just cannot do it any longer…..…there’s only one direction for costs this year and that’s upwards.

What has everyone been doing this last year or so? Living off the higher priced projects on the past, and taking advantage of their supply chain reducing its costs over the same period.

What is happening now? Prices are still being submitted at low rates anticipating that things will be bought even cheaper later on.

The bad news………….It’s just not going to happen.

The supply chain is at rock bottom and cannot go any lower. Look also at the Construction Products Association recent press release ‘Sharp Material Prices Add to Construction Woes’. I predict some serious repercussions for lots of organisations as a result. So now is the time to be vigilant and if the bank says that client is a bad bet, you know what? They are probably right.

It really is the calm before the storm………..

3 Responses to “Calm before the storm…….”

  1. 1 Peter L Masters MCIM March 8, 2011 at 3:53 pm

    Hi again Derek, I hate to agree with your post, but I do! Prices are going up everywhere, and interest rates are bound to follow! The Middle East is getting out of hand and that’s bound to put fuel costs up. The governments is trying to do the right thing but don’t seem to be convincing anyone that they are. Foreign investment, that’s what we need! But why would people invest here, no growth, no prospects of growth, an old and sick and dependent population and a younger generation that’s predominantly self indulgent and lazy. And the answer is…. ??

  2. 2 derekmynott March 8, 2011 at 6:34 pm

    Hi Peter, it’s going to be a tough time no matter what. I agree with you also about the government, they just don’t convince me at the moment that they’ve got a grip on things. My fear is things could get out of hand quite quickly if they are not careful, and that will be to the detriment of us all!

    Not so sure about your sweeping statements about the population mind!

    Having said that I think foreign investors will always look to the UK, and now is never going to be any cheaper than to invest in property here right now.

    Let’s just hope the sun keeps shining like it has done these past few days 🙂

  3. 3 buildersconf June 17, 2011 at 11:17 am

    Hello Derek,
    Although GDP in Q1 made up most of the ground lost at the end of last year, recent data suggest that activity is again stalling, and forecasts for Q2 and for 2011 as a whole are being marked down. The balance of the discussion has shifted back to concerns about growth rather than inflation and whether the Chancellor’s fiscal plans have sufficient flexibility to cope with a weakening of output. But the growth argument is not about whether the economy will slide back into recession, but about the pace of activity this year – essentially about the first digit after the decimal point. The range at present is from a pessimistic 1.2% increase in GDP to an optimistic 1.7%.
    Concerns about the tightening squeeze on the consumer are the main worry. While the MPC’s anti-inflation credibility has been undermined, there is an acceptance that much of the price pressure is either external or the result of tax changes, and higher interest rates will do more to slow the economy than dampen down inflation.
    So, at last, questions are being asked about the relevance of the current inflation target, set by Gordon Brown in 2003 when circumstances were very different. This, however, is a debate that will be left on hold for a while yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 59 other followers

About Me

I’m now the Managing Director of Mynott Associates Limited my own specialist measurement business. I’ve been in the industry all of my life since I left school. My first job was with Bovis Construction as a management trainee where I trained to become a quantity surveyor. I’ve worked for contractors all through my career, I am FRICS, FCIOB and MCIHT qualified and act as an RICS assessor. I’m also a keen Arsenal supporter having followed them from a young boy

For more information, please click on my photo.

My Tweets

RSS The Construction Index News

%d bloggers like this: