Mace tracks the lead times of 38 works packages and, Gardiner & Theobald puts brickwork in the spotlight
The summer months usually see little movement in lead times as people take holidays and market information reduces. It is therefore surprising that 14 sectors have altered lead times since June.

Piling (down) durations returned to a normal lead time of four weeks after companies hired additional rigs to cope with the work peak identified in the last article (29 June). Management staff with piling experience remain sought after.

Good capacity is still available in the steel frame (same) market although lead times remain static at 10 weeks. Companies may choose to reduce this lead time if the spare capacity continues.

Companies in the cladding (up) market report that high performance glass is becoming a frequent specification requirement with the modified Part L of the Building Regulations. This is increasing procurement periods of an already high-demand product and having the effect of increasing lead times. Both sectors of the cladding market, atrium glazing (up) companies and metal window (up) companies all quote increased lead-ins, which can be seen on the graph. It should be noted that some companies are quoting far higher periods than the graph indicates due to the uncertainty, although the sector should settle down by the end of the calendar year.

The membrane roofing (up) sector (eight weeks), a usually stable area of the market, has risen two weeks. Both the design and procurement have been increased as companies are reluctant to order materials until drawings are signed off. This is quite unusual and some companies quote late changes to specifications as the reason. It is expected the market will return to normal next time. Profiled metal roofing (up) also increases two weeks.

In recent months, the drylining (down) sector has quoted high demand as causing problems for manufacturing companies. In this period, the suppliers have been able to meet demand as usual and the lead time fell one week to 11 weeks.

Demountable partitioning (down) saw a one-week fall for the second time, now down to 10 weeks. Enquiries are quiet and lead times may drop again before the end of the year.

Standard products of the raised flooring (down) industry remain available as lead times shortened by one week to eight in total. A few companies state this period could reduce further next time, but many consider that a seven-week period would be too short to effectively plan workloads.

Escalator (down) lead-ins dropped one week to 19 weeks. Demand drops during the Christmas trading period, so most companies have spare capacity around this time. Companies remain confident in the market and expect periods to easily increase again towards the end of the year, as customers plan work to commence after the Christmas season.

Electrical installations (up) rose two weeks (22 in total) as new projects work through the design office into manufacture. This is expected to drop back over the coming six months.

UPS systems (down) dropped one week to nine overall after a rise in the last article. Suppliers are stating they have no problems, which clearly increases delivery certainty. The controls (up) sector increased lead times by one week to 16, solely based on the volume of business. This is expected to carry over into the second quarter of 2002.

Made-to-measure furniture (same) remained static at nine weeks. Although demand is currently high, investment in new machinery has balanced any production pressures.

Overall, the most significant changes occurred in the cladding sectors as the revised Building Regulations had a delayed impact. High performance glass has always been a volatile area, but this is the first time that the new regulations have actually been quoted as a major factor. Some companies may demand several more weeks until the market settles down.

Again, recruitment is cited as an influence on scheduling activities. It seems that companies cannot source people qualified in specialist fields and are having to train people from other areas of the industry. This situation has not changed in the past year and seems unlikely to in the near future.

Spotlight on Brickwork

Lead times
Lead times for brickwork have remained fairly steady at around four weeks for the past two years; in some cases, even three weeks is achievable. Most brickwork contractors say that short lead times are easy to maintain, provided that the bricks are in stock. Although stocks dropped slightly last year, they still stand at around 900 million bricks.

Despite these relatively short lead times, one main contractor advised us that "although theoretically brick lead times stand at under a month, we are always looking to get bricklaying teams of the highest quality, and invariably place the order as soon as the job is let – often as much as four months before any bricklayers are required on site".

The stability of the sector suggests that there will be no change in lead times for the foreseeable future.

Enquiry levels
The first half of this year saw a 4-5% downturn in enquiries for brickwork contracts, although there were exceptions: a few brick contractors reported continuing increases. Enquiry levels now appear to be on the increase again, and most brick contractors seem confident that 2001 will be a reasonably good year. The retail sector, particularly supermarket development, created much demand over the past year but this has now declined and the education and health sectors are rising.

Despite the recent increase in enquiries, few brickwork contractors are turning away tendering opportunities, although many agree that they work harder on winning some projects than others. In a Spotlight report on M&E installations (9 March, pages 78-79), we reported that partnering was more common in the south of England than the north. One major brickwork contractor based in the north advised us that "we are concerned that many of our competitors are now picking up significantly more partnered projects, some as much as 30% of their turnover, whereas last year we only secured 10% of the value of our contracts under partnered schemes". This suggests that the north-south divide still exists, but the boundary is moving north, and is applying to fewer contractors.

Orders and workload
Brickwork is often considered a trade almost entirely restricted to the residential sector. However, while it is true that in the City panellised cladding and curtain walling has for many years remained the vogue with many architects and planners, planning authorities in the regions often favour brickwork.

Contractors point out that brickwork should be regarded as an extremely cost-effective product. As one major brick contractor said: "For £150/m2, you can achieve a good quality product, for £200-250/m2, you can provide an outstanding facade. Just compare that with the cost of panellised cladding and curtain walling." Others pointed out the low-maintenance nature of brickwork, and its durability.

A further criticism so often levied at the brickwork sector is slow construction. Certainly in-situ brickwork involves a more labour-intensive site force compared to, say, panellised cladding. The brick industry has addressed these criticisms with new products, such as a brick cladding system incorporating hanging rails and pre-engineered brick slips. This and similar systems give the appearance of traditional brick construction with the on-site speed of panellised cladding systems.

While the perpetual shortage of suitable bricklayers continues to be a problem that goes hand-in-hand with the word "brickwork", it may not be as bad as many think. A recent report by Geoff Irvine, managing director of brickwork contractor Irvine Whitlock, addresses the problem, suggesting that "the real truth is far from what pessimists would have us believe". He highlights the fact that competent bricklayers are still available, providing they are given suitable remuneration, safe access to the works, and are treated as an integral part of the process.

One national brickwork contractor asks: "Why is there always an increase in brickwork schemes throughout the summer, when most bricklayers are on holiday?" A fair point given that, due to seasonal fluctuations in availability of bricklayers, wage rates have increased in the short term by between 25 and 30% depending upon region, with some bricklayers in the South-east currently being paid as much as £350 per thousand bricks.

One of the biggest concerns of brick producers has been the recently-introduced climate change levy, which came into effect in April this year. Imposed to help the government meet its Kyoto protocol targets for reductions in greenhouse gas emissions, the levy places a new tax on energy users. Brick manufacturers, however, are deemed to be energy-intensive customers and have negotiated an 80% rebate on the levy by signing up to future energy-saving and emission-reducing targets. This has nevertheless resulted in a price increase of £1 per thousand bricks manufactured. Of more significance to brick manufacturing costs is the overall increase in fuel costs, which is reported to have added a further £10 per thousand bricks made.

Given the press coverage of the climate change levy, it is perhaps surprising that brick contractors themselves seem unconcerned regarding the tax. The managing director of one major brickwork contractor we spoke to was even unaware of its existence.

Data courtesy of the Construction Products Association

Tender prices
According to the Office of National Statistics, the cost index for brickwork has increased 15.5% between 1995 and 2000. The Gardiner & Theobald Tender Price Indicator shows an increase in brickwork tender prices of just 14.4% over the same period.

Our survey of contractors suggests that brickwork tender prices are expected to rise by a further 13% over the next three years. Brick manufacturers are warning of price increases of 15% or more over the next year, simply to cover increased costs, including the fuel and tax increases mentioned above. One brick contractor expressed some scepticism, suggesting: "They may talk about increases of 15%, but making the increases stick is more difficult, the housebuilders will simply not accept these rises."

Whether this view is borne out, only time will tell, but brick producers have not been able to cover their own cost increases over the past two years, and it seems unlikely that they will be able to go on absorbing increases forever. Building recently reported (20 July, page 17) of one brick company that will close in September because of its inability to pass on cost rises to housebuilders. It further speculated that Hanson, who manufacture a third of UK bricks, might sell its production business.