The M&E sector is a leader in the growth of subcontractors’ tender activity

The latest survey of around 150 package contractors by leading framework services provider Southern Construction Framework shows tender volumes increased by 3.2% in the first three months of 2024.

M&E companies saw the largest increase in labor demand, up 9.5%, while dry carpet subcontractors also saw an increase of 6.7%.

This increase in activity is driven primarily by both rounds of project value engineering to achieve affordability and office modernization work.

On the structural construction side, steel frame and concrete frame specialists also saw an increase in demand, up 5.4% and 4.9% respectively.

A survey of southern region companies indicates that pipelines remain relatively strong, but contractors reported that project affordability pressures remain widespread, with many projects prone to outdated budgeting and high interest rates.

Construction costs continued to increase in the first quarter, by an average of 2.3%.

In terms of industry, the highest inflation was recorded in the biscuit industry (4.7%), M&E (4.6%), brickwork (2.6%) and carpentry and carpentry (2.4%).

A quarter of surveyed subcontractors said their biggest challenge over the next 12 months was ensuring projects progressed from pre-construction to on-site, with ongoing program delays and project cancellations due to rising costs, leading to concerns about ensuring sufficient workload despite high workload levels.

Adrienne Turner, framework manager at SCF, said: “The combination of companies seeing more opportunities to bid despite high levels of insolvencies is creating a complex mix in the industry, which is likely to lead to some companies being close to failure and making competitive bids to keep them going. on the market .

“With challenges likely to persist throughout 2024 as interest rates remain high, customers need to be careful who they choose, as simply choosing price can be extremely damaging to the project if the company chosen is unable to deliver.

“While challenges are likely to persist throughout 2024 as interest rates remain high, it is critical that clients engage with their main contractor early to ensure design solutions take into account current market requirements prior to detailed design.”