Civil Engineering in Wales Set to Face Another Bleak Year; Rhodri-Gwynn Jones, Director of CECA Wales, Says That the Beleaguered Construction Industry Is Unlikely to Show Signs of Recovery from Recession until 2011
Byline: Rhodri-Gwynn Jones
The latest predictions from the Construction Products Association make very depressing reading for the civil engineering (and wider construction) sector in Wales. Construction workload is unlikely to recover from recession until 2011, and contractors will have to wait a further decade before workloads return to the 2007 peak - yes, that's right, 2021!
Meanwhile tender prices continue to fall, by 5.2% in 2009, with a further 1.8% fall predicted in 2010.
A more drawn-out recession could see a further fall of 1.9% in 2011.
Compounding the concerns are the likely public spending cuts, currently being considered in their draft forms , with the Welsh Assembly Government's Economy and Transport Directorate predicted to lose some pounds 60.5m of its capital spend in 2010/11.
The uplift of 2.1% in the budget of Wales' 22 local authorities will result in a severe restriction in the available funding for revenue and key capital projects next year.
A recent Institution of Civil Engineers public service satisfaction survey found that satisfaction with roads and highways has dropped significantly between January and September this year, citing the huge road maintenance backlog as a factor in the changing public attitude.
Wales already has 94,000 potholes that are filled annually at a cost of pounds 4.3m according to the Annual Local Authority Maintenance Survey 2009, and the frequency of road surfacing stands at once every 95 years. Even at the current rate of spend on highway maintenance it would take 15.6 years to clear the carriageway maintenance backlog - therefore motorists beware!
And incidentally, the amount paid out in road user compensation claims in Wales has by now reached pounds 10m!
Cash flow worries as a result of increasing late payments (pounds 2.5bn owed to SMEs in Wales and England on any given day); a 65% increase in the number of construction companies filing for insolvency compared to 2007; 1 in 5 civil engineering companies making an operating loss, some for the first time in their history, other for the second and third year running, and where 1 in 10 could change ownership, all tell a similar story of an industry fighting for survival.
SMEs in Wales are losing pounds 53m a year due to Government red tape in complying with legislation and the estimated annual cost of prequalification by the construction industry in the UK is pounds 1bn.
Many good words spoken have yet to manifest themselves into good deeds and projects - when are the barriers to procurement opportunities going to be removed? …