Commenting on the latest CIPS UK Construction PMI Richard Threlfall, KPMG UK Head of Infrastructure, Building and Construction, said demand was outstripping supply resulting in rising costs for main contractors.
“Availability of sub-contractors has fallen at the sharpest pace since August 1997, leading to increased supplier lead times and higher rates. It will be a cause for real concern amongst main contractors that rates charged by sub-contractors have increased at the steepest pace since the survey began 17 years ago.
“The construction supply chain took most of the pain during the recession, with many businesses going bust and output falling 20 per cent below its peak. But over the last year demand has picked up sharply and main contractors are having to compete for the reduced capacity in the market. Now it is main contractors taking a thrashing and the supply chain holding the whip.
“Main contractors’ difficulties are compounded by the shortage of skilled labour, and rapidly rising demand for construction materials which must soon translate into a further upswing in materials inflation.”
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Notes to editors:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.