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As yet another north west contractor goes into administration, the fourth in four months, Manchester’s developers are beginning to worry, and come up with their own solutions to the issue of getting buildings built.
City developers fear a sharp rising in price from specialist subcontractors, less choice and higher tenders from main contractors, and a growing reluctance among some contractors to take on risky residential work.
The latest to bite the dust was Bardsley Construction, which fell into administration just before Christmas.
Other contractor collapses over the last four months include Pochins, Worthington and Bolton-based Forrest.
Dukinfield-based Bardsley's live projects included Far East Consortium’s 12-storey, 136-unit Mount Yard residential development in Manchester’s Northern Quarter. FEC has now formed DEX Construction, a new stand-alone UK construction business, to complete the Mount Yard project by the summer 2020 deadline.
DEX will be run by newly appointed managing director Simon Adams. DEX Construction is taking on around five managers previously employed by Bardsley, and all the subcontractors working on the scheme will be re-engaged to protect jobs and ensure continuity.
FEC regional manager Gavin Taylor suggested that every construction cloud has a silver lining. “The situation has brought forward our plan to be capable to self-deliver our developments. At the same time, as we grow DEX, we will be free to explore opportunities with other developers and investors nationally,” he said.
But for other Manchester developers the high attrition rate among local contractors is causing headaches. Fewer contractors are willing to take on residential projects for fear of unbalancing their portfolio, whilst others have corrected their pricing upward.
Subcontractors, and in particular the more labour intensive packages such as brickwork and ceiling and wall contractors, are starting to become significantly more expensive as there is contraction in the available and skilled labour pool. This is more acute on residential schemes where there is significant emphasis on finishing trades compared to an industrial unit or office scheme.
Further construction price rises are expected, a trend exacerbated by the government’s push to increase housebuilding and the volume of major infrastructure projects.
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