Shortages hit brickwork market

Desperate shortages of labour and materials are destabilising the brickwork market in the south-east, say specialist contractors. They claim the market is now so volatile they are unable to bid for new work as rates and prices spiral out of control.

Delays and cost overruns now threaten major projects in London, say the contractors, as labour dries up and firms draw back from tendering in what they see as an impossible situation.

The most alarming evidence comes from Bob McDermott, chief estimator with leading brickwork contractor Ben Barratt.

He said: 'Labour rates and brick prices have already risen sharply this year as a result of the upturn in spec housing. But they are now so unpredictable we have actually stopped taking on new jobs - even though there is plenty of work around. We cannot justify the risk. We are just sitting tight until the situation stabilises.'

Meanwhile his firm has laid off brickies and is using foremen as labour to complete existing contracts.

Barratt recently had to purchase concrete blocks from a DIY hardware shop because normal suppliers had dried up. Said McDermott: 'Block and brick prices are up around 20% in the last six months, delivery times are up to 20 weeks and whereas manufacturers would previously guarantee fixed prices for a year, it's now three months or not guaranteed at all. With labour rates rising fast - how can you put in a sensible bid?'

The situation is so bad that one national contractor told McDermott: 'Don't bid for our work. It is too risky. We will use small gangs until we can be sure you will not lose money on our work.'

McDermott added: 'One major contractor who understands our position showed us his books for one big job - but they had priced too keenly and we knew they would not be able to pay us enough to cover our costs.

'We declined to tender.'

His story is confirmed by Gary Hollobone, md of Romford-based GCH Construction Group. 'Labour and materials supply has gone crazy. We have had problems supplying every one of our current jobs. Since last year brickie rates have nearly doubled from œ45 per day to œ70-per day and the rates look like going higher still.'

Hollobone said : 'I know of six or seven large 80-100 brickie jobs in London which the main contractors would like to have let by now. But we are being very cautious about what work we can accept. We are just maintaining our turnover.'

Morris Lyons, chairman of another of the top five brickwork contractors, Lyons and Annoot, said that main contractors which had bid on two-year fixed price contracts were now in a desperate situation 'They don't know which way to turn.

'In many cases they cannot afford to pay the current rates on brick contracts, and so they take on small gangs of illegal workers who work for less because they are already signing on the dole.'

l Butterley Brick was this week quoting delivery times of up to 20 weeks for bricks in some areas of the country. To cope with increased demand it has opened spare capacity at its Claughton works near Lancaster which will produce a further 420,000 bricks per week.