Margin squeeze ahead for contractors
Author: ross sturley CIMCIG
Construction prices are predicted to fall by as much as 6% by the end of 2018 as the balance of industry power shifts back to clients, reports Construction Enquirer.
The latest forecasts from Arcadis predict erosion of contractors’ margins as demand drops and input costs continue to rise.
Competition among contractors for work particularly in the industrial and commercial sectors will intensify, while in the infrastructure sector, steady demand should enable suppliers to maintain price levels, according to Arcadis, who see the balance of power shifting to clients in many sectors.
The combination of deflating construction prices and inflating input costs will impact overhead and profit levels for contractors, making it important to choose the business wisely.