Civil engineering contractors costs leap 8% in 12 months

The average cost of items purchased by Britain's civil engineering contractors has risen by around 8% over the past year - three times the current rate of inflation.

More than 100 Civil Engineering Contractors Association (CECA) members have said that since October 2001 there have been increases on 19 items, including materials commonly used in civil engineering construction, plant hire, and the disposal of waste to landfill.

Across Great Britain as a whole, the cost increase was 5% or less for a total of eight of the 19 items. At the other end of the scale, however, costs of aggregates and of steel for reinforcement were up by 10%, and those of blacktop and ready mixed concrete by 9% and 8% respectively.

For two of the four broad categories of personnel, engineering staff and skilled operatives, the rise was 7%, and the increases in costs of precast concrete products and of disposal of waste to landfill were also around that level.

Chris Harding, CECA chairman, said: "This is a very worrying set of results. We knew that, with the Aggregates Levy, there had been some increase in cost pressures on contractors, but this survey has found a somewhat higher increase than we had anticipated.

"While contractors will always do their best to cancel out cost increases with improvements in efficiency, over the past year our members have experienced increases that they simply cannot absorb, and any client with a fixed budget will find that he gets less for his money.

"For CECA members the client is often the government, or funded by the government, which must now pay more for civil engineering work principally on account of the Aggregates Levy that it introduced earlier this year - with the best of intentions, but without fully considering all the consequences," he said.

" We told the government what to expect when the Levy was first announced. Now the chickens are coming home to roost."