Construction ' back in comfortable rut'

The construction industry is "back into a comfortable rut" said Alfred McAlpine chief executive Oliver Whitehead this week. "The outlook is okay and margins are holding up," Whitehead reported.

In civils work, McAlpine has found a strengthening of demand during the first four months of 2000. "Our civils guys are more optimistic than they were 6-8 months ago as there are still a few roads coming out and the water sector is quite busy. Also, there is more remediation work, cleaning up sites, and on defence there is work to be won."

Asked if McAlpine was keen to take a larger slice of work with Railtrack, Whitehead said: "We're still around. We're being careful."

The housing market is running to McAlpine's expectations. "It has cooled down a bit but is still okay," said Whitehead. "The overheating in London has cooled off. You have to envisage the west Midlands now cooling down as a result of the turmoil at Longbridge."

During 2000, McAlpine has invested further in its strategic landbank in the homes division and has launched new housing businesses in London, the Thames Valley and East Midlands. It has been chosen as the developer for the GCHQ housing project in Cheltenham, a £150m scheme that will provide residential land over the next 10 years.

McAlpine is one of five "old economy" backers for Mercadium, a new e-commerce site which predicts savings of 5-10% in the cost of building materials. The other four industry heavyweights are Aggregate Industries, BPB, Pilkington and RMC.

Mercadium will be run by Jerome Losson, Robert Gill and Emma Welsh. "They have got sensible ideas," said Whitehead. "We're in it for two reasons: for the opportunity to buy in-house and as an investment."

Whitehead pointed out: "A portal that lets McAlpine buy on-line must provide a good quality service and competitive prices - we want both. This is not an alternative to supply chain management but can be part of it. All we are doing is removing some of the internet mystique.

"The old economy people who know how to run their business are starting to add internet skills. We have remodelled the McAlpine house selling website. It enables people to cut out a lot of legwork. Rather than visit as many as 50 sites, they can first draw up a short-list based on the right specification and location, and then do the travelling."