Some 46% of respondents reported a decrease in orders in the fourth quarter of 2011, another significant rise on the 37% that saw the number of orders decline in Q3.

With only 57% of specialist contractors now working on public sector projects, down from 67% last quarter, the reduction in capital expenditure is being felt across the supply chain, sparking fears of further downturn in the industry.

The cutbacks in investment and uncertainty about where future work is going to come from is leading almost a third of specialist contractors to predict further reductions in workloads over the next year and a quarter expect to downsize their businesses during this period. The majority of specialists (55%) are planning less than three months ahead and there are already concerns about the capacity to deliver as the economy returns to growth.

78% of companies surveyed have monies withheld against them in retentions, at an average of £151,022 per respondent, with 32% of all retentions overdue for release and 21% ultimately written off as bad debt.

A member of the Construct Concrete Structures Group said told the survey: “Main contractors are holding on to our money for longer producing spurious claims to counteract our requests for payment.” Those specialist contractors that are working in the public sector are faring better, with 73% managing to secure nil retention on their work.

NSCC chief executive Suzannah Nichol said: “In order to overcome the desperate situation faced by specialist contractors, it is essential that the supply chain works together to increase efficiency and ensure prompt payment. Those specialist contractors that continue to invest in their workforce and manage their cash flow will be the ones that are best placed to deliver when the economy returns to growth.”

The full survey can be seen on the NSCC’s website. 

Overview

• 37% report a decrease in enquiries, down from 39% last quarter. 46% report a decrease in orders, up from 37% last quarter. 32% report an increase in enquiries and 30% report an increase in orders.
• 15% report more difficulty in recruiting skilled labour, up from 11% last quarter. 18% found it less difficult to recruit. 6% were unable to bid for work due to skills shortages.
• 62% report working at over 75% capacity, down from 67% last quarter. 30% report working at over 90% capacity, down from 34% last quarter.
• 29% expect an increase in workload, up from 22% last quarter. 29% anticipate a decrease in workload, down from 32% last quarter. 55% have a business planning horizon of less than 3 months.
• 22% expect to contract their businesses, the same as last quarter. 15% expect to expand their businesses compared to 12% last quarter.
• 51% report falling tender prices compared to 50% last quarter. 18% report increasing tender prices compared to 13% last quarter.
• 84% report increased suppliers’ prices compared to 71% last quarter. 4% report lower prices compared to 6% last quarter.
• 71% of respondents reported falling margins. 8% reported increasing margins.
• 6% are being paid within 30 days, up from 2% last quarter. 75% received payment between 30 and 60 days and 16% were paid between 60 and 90 days. 3% wait over 90 days to get paid.
• 57% reported that they had carried out public sector work in the last quarter and, of those, 35% said that they had been paid within 30 days on all these contracts.
• 78% have retention monies withheld from them and 32% of these retention monies are overdue for release. On average, 21% of outstanding retentions.

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