The lead times for this quarter are continuing to decline, reports Mace, thanks to better relations with the supply chain and decreasing pressure on design offices. And overleaf Gardiner & Theobald reveals a positive outlook for curtain walling companies – despite the tougher standards of the new Part L
For the third consecutive quarter there is a downward trend in the lead times, with nine sectors reporting a reduction and five experiencing an increase in lead-in periods.

The lead time for rotary piling - (staying level) remains at five weeks. Although most companies were quieter than they were six months previously, workload is steady. Lead times for continuous flight auger piles are lengthening as a result of an increase in projects requiring them.

Although both concrete works - (staying level) and structural steel frame - (staying level) companies reported changes in the build up, overall lead times remained unchanged at nine and 10 weeks respectively. Reinforcement is taking up to four weeks to be delivered for insitu concrete and American surcharges on steel imports may affect supply.

Membrane roofing - (going down) fell by one week to seven. Enquiries and projects were down on the previous six months, leaving materials readily available.

Brickwork - (going up) lead times increased to five weeks (up one week) as new projects put pressure on design detailing resources. Blockwork lead-in remained at four weeks owing to a reduction in the design input being required.

Drylining - (going down) lead times decreased by two weeks to nine. Design offices have recruited staff and are also being asked to produce less detailing for projects than in the past few months. Despite the overall fall, companies have stated that plasterboard is no longer on next day delivery and plaster availability from British Gypsum is greatly reduced while their factory undergoes essential maintenance. There are not expected to be any improvements on this situation until September.

General joinery - (going down) and specialist joinery - (going down) companies reduced their lead times to 13 and 16 weeks respectively. The main reason given was reduced order books. However, lead times are expected to increase in the busy summer months.

The raised flooring - (going down) sector reduced average lead times from eight to six weeks, a fall of two weeks. Firms are quieter than six months ago and this has eased pressure in design offices and factories.

The lead times for architectural metalwork - (going down) companies fell one week to 14. The supply chain here is responding to the steady workload and has been able to reduce supply periods.

Decorating - (staying level) companies report no change to the lead time of four weeks. However, a shortage of industrial painters is expected, as firms are busy with steady workload through the summer. Most specified products are available off the shelf and even bespoke or European materials are available in just two weeks.

Thirty-eight weeks is the lead time for passenger lifts - (going up) after an unusual drop to 35 weeks. Some firms are now quoting up to 42. Manufacturing durations have risen to 29 weeks.

Three months ago the lead time for mechanical pipework - (staying level) was expected to rise, yet the average remains at 18 weeks, with a couple of firms reporting lower periods.

The lead time for sprinklers - (going up) went up two weeks to 12 as procurement and manufacture periods increased as a result of a high workload.

Air-handling units - (going up) can now be obtained in only seven weeks, a fall of two from previously quoted lead times. Companies now have better relationships with their supply chain, which is currently very reliable.

As enquiry levels and new projects fell compared with previous months, so did the lead time for Uninterruptible power supply systems - (going down) by one week to eight.

Voice and data cabling - (staying level) lead times remained unchanged at eight weeks. The only product needing advance ordering is OM3 fibre optics, but as this product is not required early in project installations the overall lead time is not usually affected.

Spotlight on Curtain walling

Lead times

Lead times for stick-system curtain walling currently stand at about 20 weeks for medium to large projects, or 16-18 weeks for smaller schemes. Pre-unitised and prefabricated curtain walling systems take longer at 26-30 weeks, but benefit from shorter on site periods. There is little indication that the rapid growth in lead times experienced last summer is likely to repeat itself this year: a levelling-off of workload should take the pressure off. Some of the medium-sized curtain walling contractors are being put under pressure to reduce lead times in order to get a quick start on site. One commented: “With order books for the major players full, there is a tendency for us to get the scraps falling from their table.” It seems that it is not unusual for contractors to be urged to submit “hurried” tenders and then asked to start on site in as little as eight weeks. Although it may be possible on occasions to accommodate such requirements, there will inevitably be a price premium.

Orders and workload

No definitive data is published on curtain walling, but as most is destined for commercial offices, the output figures for this sector (see chart) provide a good indication of growth over the past four years. Recent forecasts suggest growth in the commercial office sector may stagnate this year, then suffer a 2% contraction in 2003. In constant prices, however, output stands higher than in any year except 1990. These indications are borne out by the curtain walling contractors that contributed to the Gardiner & Theobald tender price survey. Although some companies were seeking only to maintain turnover, others had taken the chance to expand. One firm doubled its turnover in 18 months without expanding its client base. The revised Part L of the Building Regulations calls for an improvement in the performance of the building envelope. Initial speculation was that this would cause a shake-up in the curtain walling industry, resulting in increased costs and in many of the smaller curtain walling contractors being unable to meet the revised specifications. However, the actual effect seems less dramatic than that. Many larger contractors have experienced little change in their project specifications. One said: “The premier division of curtain walling contractors will only need to make minor changes to their product and even the first division will not require great change. Only in the second division [small companies] will there be a need for significant change.” As the revised requirements consider the whole envelope, thermal solutions can be achieved by using low-emissivity soft-coat glass with relatively simple curtain walling systems. The UK’s “mill and fill” systems use a resin-filled routed groove as a thermal break, rather than the thermal barrier used in the more expensive Continental systems. There was concern that the UK systems might not reach the required U-values but after successful tests, more fill and mill lines are being planned. Over recent years, there has been a major growth in the use of unitised and prefabricated curtain walling. Although initially more expensive and requiring longer lead times, the unitised system offers a shorter on-site period. It also tends to suffer less from leaks. A number of curtain walling contractors are broadening their scope to include planned maintenance. David Cation at Haran Glass explained: “There is a marked growth in planned maintenance – extending to curtain walling. In the past, tenants would tolerate occasional leaks in curtain walling but they have become more demanding.” Output figures courtesy of the DTI. Forecasts: Forecasting Committee for the Construction Industries.

Tender prices

Margins on curtain walling works have increased over the past three years, but according to David Cation of Haran Glass: “The market remains competitive and margins are not as high as the product deserves.” It is expected that the cost of curtain walling will increase this year, mostly as a result of the higher specifications needed to comply with Part L of the Building Regulations. Many contractors expect margins to be further squeezed. Glass prices have remained reasonably stable for the past few years. However, last year there were price rises resulting from the aggregates tax on sand used in UK glass and it is expected that product changes caused by Part L requirements may be used as a catalyst for further increases this year. Labour rates are expected to increase about 5% this year, somewhat above general inflation, principally to retain personnel. European glass makers still view the UK, which is dominated by a few native players, as a tempting market and are seeking to increase their share. Saint-Gobain recently introduced its own float lines in the UK. According to Gardiner & Theobald, curtain walling tender prices are expected to increase by about 2.5% this year and next, slightly less than annual tender price inflation as a whole, which is forecast at 3.5% for 2002 and 2003. This is primarily the result of an anticipated levelling-off of commercial growth leading to keener tendering and reducing margins. Contractors are trying to combat margin reductions by minimising waste. For example, stick system contractors are ordering aluminium profiles in storey-height lengths, rather than the standard 6 m or 8 m. Although the cost of curtain walling installations will rise as a result of legislation, the whole-life cost benefit should not be overlooked. Initial expenditure on systems that offer higher thermal efficiency and lower solar gain will reduce building operating costs. Although these benefits will be enjoyed by the occupier rather than the developer, it is likely that properties with reduced operating costs will command higher rents. Whole-life costs may even be reduced, producing financial and environmental benefits.

Enquiry levels

The events of 11 September had a slight, but immediate, effect on the curtain walling industry with many firms reporting a downturn in enquiries. However, most contractors suggest that the market has since recovered to close to previous levels. Some firms have even reported growth of 20% over the past 12 months. Although enquiries are healthy, there are significant regional variations, with London and the South outperforming other regions. There are also significant regional variations, with the Edinburgh area generating many more enquiries than the Glasgow region. Curtain walling contractors with offices in Ireland have reported a downturn in the Dublin area, which until recently was enjoying a boom. Despite the country’s continued high public expenditure, the NASDAQ shares crash has resulted in many software firms – major investors in the Dublin area – making significant investment reductions. The regional variations are not, however, a major cause for concern. Enquiry levels nationally are higher than for a decade and many contractors are reporting almost full order books for the remainder of this year, with plenty of enquiries for 2003. One curtain walling contractor did sound a note of caution: “The overriding question has to be, when will it stop? This peak has gone on for some five years, and it cannot go on forever. We need to be prepared for the next downturn.”