The Construction Industry: Adapting to the Current Climate
Gone are the days when contractors could take their pick of work. Many contractors report that they have “capacity” and that generally means that they are quieter than they would like to be. Financial commentators report a drop in tender prices of 17% plus over the last 18 months with further drops predicted. It is also a sad truth that the construction industry has fallen prey to insolvency more than any other sector. Whilst this looks gloomy for the industry, maybe it is a question of adapting to the market conditions. A savvy contractor or sub-contractor can help to protect himself against possible problems. A few ideas are:
- If your employer hasn’t paid you by the due date and there is no effective withholding notice, think about suspension and reducing your exposure to further loss;
- Think about including a Retention of Title clause in your contract to avoid ownership of materials passing to the Employer before you’ve been paid:
- Be aware of your potential entitlement to decline to pay suppliers if your Employer has not paid you and is insolvent. Your rights will depend upon the circumstances of the case but it’s certainly worth being aware of the potential.
- On a more practical note, the construction industry is responsible for three times as much waste as the domestic sector. Reducing waste will reduce cost.