Civils contractors bypassed by recovery

More than half of the UK's civil engineering contractors reported a decline in workload in the last quarter, according to the Federation of Civil Engineering Contractors.

The FCEC's quarterly workload survey, released last week, also slammed clients for "abusing" their bargaining position. With the civils workload "deteriorating sharply", clients are re-writing contracts, forcing contractors to carry additional risk.

Jim Turner, FCEC director of external affairs, pointed the finger at both public and private sector clients:

"The Government is practising double standards. It claims to be a best-practice client but in reality the situation is getting worse. It's worrying and it's saddening."

Turner revealed that the FCEC was drawn into two negotiations last week where clients had struck out Clause 12 of the ICE Conditions.

"Clause 12 is there to protect the contractor against unforeseen difficulties with ground conditions," said Turner. "But it's a buyers' market and the tendency is for clients to try to shift risk."

The FCEC survey involved 128 civil engineering firms with an aggregate turnover of more than œ4 billion a year: more than half the country's total civil engineering workload.

While 26% of firms said order books were rising, this upturn was swamped by the 50% who reported a decline in workload.

Four out of every 10 firms said they now employ fewer operatives on site compared with 12 months ago.

While almost one in ten said they were seeing higher tender prices, 44% reported a decline, "a clear indication of difficult market conditions," according to Turner.

The FCEC survey revealed that firms with 500 to 1,000 operatives have bucked the downward trend. The 12 contractors who fall into this category reported a 33% improvement in workload (by value), compared with 12 months ago. They had 17% more staff on site and 33% more operatives.

All other groups reported a deterioration. The workload of firms with under 100 operatives was 41% down, while those with 100-250 operatives was 20% lower. Firms with 250-500 operatives reported a halving of workload, while contractors with over 1,000 operatives suffered a 31% downturn in workload and a 46% drop in the number of operatives on site.