Lead times have remained constant at eight weeks during 2003, 2004 and 2005. This consistency reflects the steady level of work in the market and the sector's ability to supply the demand.
Although the commercial sector was relatively quiet and contributed less than previous years, the market has been balanced by an increase of work in the retail and public sectors, particularly health and education. So far in 2006 lead times have stayed at the eight-week mark, despite suppliers reporting problems with some materials.
The market sector is busy, with the availability of management and labour resources the main constraint driving lead times, rather than the effect of material supply and demand.
This trend of eight weeks' lead time is likely to continue to the end of this year and into the first quarter of 2007, bolstered by the increase in private sector investment particularly within the retail and commercial office new-build and fit-out markets. Gardiner & Theobald forecasts a reduction back to seven weeks over 2007 but it seems a return to the optimum six-week lead time is unlikely.
Small projects are being quoted at four to six weeks' lead time to carry out preliminary works such as design, approvals and site set-up. However most major orders are being pre-booked eight weeks in advance to secure personnel. Contractors can supply projects in between these lead periods but it is more through chance than planning.
The sprinkler market is a well-established sector serviced by a relatively small number of 30 or so approved specialists. The number is polarised between eight dominant major contractors, two with a £20m turnover and six in the region of £5m to £10m, and 25 or so small and very small companies. The increase in smaller contractors has been prevalent in the expanding residential and care home sector, where they can compete with the larger contractors, despite limited technical and financial backing. All sprinkler installation contractors are required to be listed by the Loss Prevention Certification Board.
Generally, market conditions are good for the sprinkler sector. The busiest areas in the UK remain the south of England, predominantly London, with much retail and office fit-out work on offer. Conditions in the Midlands are good with a fair amount of PFI work, but a degree of capacity has been reported. Manchester is reported to be slow at present although one contractor said "a number of retail projects starting late spring or early summer should bring an upturn''. Scotland is benefiting from an uptake in the Sprinklers in Schools initiative, although feedback from the market suggests there are difficulties in tendering because of terms of payment conditions.
Recruitment has been highlighted as a major problem - over the past 10 to 15 years little training has been done and now the industry appears to be suffering a skills shortage. This applies to all grades of labour and resources from estimators, designers, and project engineers to site labour (direct and contract). This was summed up by one contractor who commented: ‘'Once you have a good team, you hang on to them''. The increase in demand in the industry appears to have been fuelled by recent legislative changes and an increase in retail, offices and warehouse construction projects.
Many companies directly employ, train and gain certification of their operatives, supplementing their peripheral labour with temporary workers as required. The UK is still seen as a great training ground for design engineers around the world.
Operating efficiencies have increased with the use of mobile towers and cherry pickers, along with the introduction of grooved pipefittings. prefabrication is now widely used with the added bonus of being able to apply powder-coated finishes at the prefabrication works.
Tender prices for sprinkler installations have remained fairly steady over the past 12 months despite increases in the basic cost of materials during this period.
Steel forms part of the primary raw material and like other steel product consumers, the sprinkler market has been exposed to price rises and availability problems. One contractor said: "It's going up at about 5% a month." Once any stocks or pre-orders have been exhausted manufacturers of steel pipework are passing the increases on, in the form of higher tender prices.
These increases in material costs are compounded by the continued demand for sprinklers and busy order books. This demand is set to continue during 2006, albeit at a slower rate, and peak in 2007 when the majority of contractors expect to be extremely busy. This reflects the current predictions that the commercial sector will be much busier later in 2006 and into 2007.
Gardiner & Theobald has no evidence of contractors buying work to maintain order books and turnover, with one contractor reporting ‘'only limited cut-throat tendering at present''.
However, problems can arise in design and co-ordination of a project, where input of the sprinkler specialist can be significant in providing critical information. To prevent incorrect assumptions being made regarding sprinkler requirements, the contractor should be appointed at an early stage. If this is not possible, allowance should be made within the pre-construction programme for the specialist to develop its design and for this to be co-ordinated with the overall design.
Those pricing for sprinklers should consider the following factors:
Sprinkler contractors tend to prefer to work directly for the main contractor in preference to being subcontracted under the mechanical and electrical package. The reasons for this appear to be a general concern that once the subcontract has been awarded, the successful M&E contractor will re-tender the specialist packages to non-preferred contractors that offer a cheaper price.
Subcontractors' terms and conditions also appear to be a cause of problems, in particular payment terms. One contractor said: "We know that often our works have been paid by the main contractor while we are made to wait. This can then become by stealth a pay-when-paid situation''. There still seems to be a cautious reluctance to quote some M&E subcontractors based on past experiences.
Orders and workload
Flexible drops to sprinkler heads
Without question one of the most innovative developments in sprinkler systems in the past year has been the introduction and approval of flexible drops to sprinkler heads. The flexible drops use a stainless steel flexible pipe that is manipulated by hand to position the sprinkler into the centre of a tile at the correct height, enabling the heads to be located and secured in the correct position within minutes.
Flexible sprinkler connections perform the combined functions of an arm-over connection and adjustable drop pipe. The traditional method is labour intensive, involving cutting and threading pipes, assembling them with elbows and adjusting to fit above the centre of the ceiling tile at the correct height.
Flexible connections can be easily moved to install other equipment or change the ceiling layout and are seen as providing benefits to the building owner, end user and installer. They are being used in a wide range of premises including houses, blocks of flats, hospitals, care and nursing homes, schools and some historic buildings.
Domestic and residential sprinklers
The installation of sprinklers in residential buildings is not currently a statutory requirement in England - however, the subject has attracted a high profile in both local and central governments. The ODPM's Building Regulations division has commissioned a two-and-a-half year study on the effectiveness of sprinklers in residential premises.
Local councils, with the full support of the Fire Brigade, have already implemented new strategies and now actively promote the installation of residential sprinklers in housing developments. Examples of these installations can be found in Merseyside and West Yorkshire.
There is now an enormous amount of information on the internet, which in many ways reflects the growing support for residential sprinklers.
In Scotland since May 2005 all new care homes, sheltered housing and high-rise residential accommodation have been required to be fitted with sprinklers. The proposed new building standards for domestic and residential sprinkler regulations will, if approved in 2006, put the onus on the building owner to provide sprinkler protection and adequate protected escape provision.
Sprinklers in schools
Will sprinkler systems become mandatory in schools in 2006? Over the next 10 to 15 years the government has committed to replace or refurbish all secondary schools.
At a reported £25bn, the Building Schools for the Future project is an enormous investment. In the light of this, pressure from various bodies and institutions is mounting on the government to make sprinkler systems mandatory in all new-build schools. If this were to become legislation the implications could be quite significant to the sprinkler industry.
Factors to consider when pricing for sprinklers
Scope of project
- Site management
- Preparation of co-ordinated working drawings
- Site office and storage facilities
- Scaffolding and other access equipmentesting and commissioning
- Training of client’s staff
- Design and produce operation and maintenance manuals
- Designated sprinkler protection coverage
- Contractual requirements
- Design responsibility
- Available resources
- Other trades
- Site constraints