Lead times

Lead times for bespoke lift installations remain unchanged at up to 38 weeks, but this figure is only for major installations. Smaller projects can take about 28 weeks, with lead times for standard lifts as low as 20-24 weeks.

Although the overall lead time remains static, design periods have lengthened because of an increase in workload, and manufacturing periods have reduced slightly.

Most schemes tend not to have totally bespoke installations, but use a proportion of standard items – including the shaft – with bespoke lift car finishes. This reduces costs and cuts lead times.

The continuing growth of workload might have resulted in lead times extending further, but increased standardisation and greater efficiency has kept lead times down. Lift contractors say lead times are likely to shorten over the short to medium term, thanks to standardisation and an expected slight drop in enquiries.

Enquiry levels

Enquiry levels for lifts installations have risen and risen over the past few years, so much so that they are almost back up to their 1989 peak.

Steven Proffit, northern sales manager of Express Evans lifts, describes the market as "buoyant, with enquiry levels holding up well". His view is shared by most other major lift firms. In the bespoke market, private commercial remains the prime client sector, with continued activity within retail centres. With most lottery-funded millennium projects now tendered and on site, that market will weaken over the next few months, but private finance initiative and public-private partnership projects are expected to provide a rich source of work.

One major lift manufacturer says: "There are still many major projects waiting to go ahead, but the market remains so tenant-driven that there is never a guarantee they will get off the ground."

In the lifts components market, a major area of growth is asynchronous linear drives, which remove the need for a lift motor room, offering space-saving advantages over standard lift designs. Pioneered by Kone, other manufacturers are now offering similar systems. Although presently limited to about 1.6 m/s, this offers sufficient performance for most applications. Only the commercial office bespoke market demands high-speed lifts operating at speeds of up to 8 m/s, and even here new technological developments are resulting in reduced lift motor room space requirements.

Both the lift contractors and the Lifts and Escalators Industry Association agree that continued growth of enquiries at present levels seems unlikely, and that next year may see a slight drop in activity within the sector. However, enquiries and activity remain high, and the market seems buoyant.

Orders and workload

Order levels have seen steady growth since 1996 and if figures for the second half of 1999 are similar to those for the first half, workload will have almost returned to 1990 levels.

The introduction of the Lifts Directive 1999, which applies to new lifts commissioned after

1 July 1999, caused particularly high levels of workload. On the whole, it has meant that additional safety requirements have had to be incorporated in lifts installed after this date. These include provision for 24-hour lift communication, door impact protection, the ability to stop a lift car travelling upwards, enhanced security for maintenance staff and other safety requirements.

Most sectors experiencing strong growth are suffering from labour shortages. Although lift companies are having problems procuring new labour, the problem has, to some extent, been addressed by new technology. Phil Catterel of Express Evans Lifts says: "The trend through the 1990s has been a move away from the bespoke market to a greater use of model lifts – a standard range of lifts modified to suit the user's requirements." This has resulted in significant cost and time savings.

The bespoke and refurbishment lifts markets still require a highly skilled workforce, whereas the workforce in the standardised lifts sector has become less skilled as a result of increased prefabrication of components. Value engineering has also resulted in more of the process being carried out at the factory, offering greater quality control, improved efficiency and reducing on-site installation time.

New technology has certainly reduced the workforce. Whereas workload for 1999 is likely to reach 90-95% of 1989 levels, data from the National Association of Lifts Manufacturers and the Lifts and Escalators Industry Association suggests that the workforce may have halved over the same period.

Source: Derived from data supplied by the LEIA

Tender prices

The biggest single factor affecting tender prices for lifts last year was the introduction of the Lifts Directive 1999. Its requirements have added £1000-1500 to the cost of each lift, which can represent a 5-7% increase on the tender figure for an off-the-shelf two- to three-storey lift. David Fazakerley, director of the Lifts and Escalators Industry Association, says: "There is certainly a cost issue associated with the new regulations, with some problems arising where lift contracts overran the cut-off date."

Lift contracts completed before 1 July 1999 were exempt from the new regulations. However, delays and overruns on some projects meant the lifts package was not completed until after the regulations came into force. Those installations therefore had to comply with the directive.

Tender prices have varied in different sectors of the lifts market, with little price movement in the standard lifts sector. The bespoke sector has seen increases through the year, with tenders for lifts without motor rooms seeing the biggest rises. One lift contractor says: "The new motor room-free lifts were initially discounted to get market share, but once they were accepted, the prices increased." Another adds that budget figures for motor room-free lifts given towards the end of 1998 could, in some cases, be increased by as much as 40% to reflect today's market price. This reflects the establishment of new technologies, which initially were heavily discounted.

Contributors to Gardiner & Theobald's tender price survey claim that lift installation tender prices increased by an average of just 3.7% in 1998. Their forecasts for 1999 and 2000 indicate a stabilisation of growth, with increases of 3.5% and 3% respectively, reflecting the expected levelling-off of enquiries.

Margins, although higher than in the mid-1990s, remain fairly lean. One lift contractor says: "We are our own worst enemy; by keeping tenders so competitive, margins are being kept ultra-tight." Another contractor admits that "margins are not what we would like, but they have improved over the past few years thanks to the buoyant nature of the industry". The LEIA's Fazakerley agrees: "Profitability is certainly not what it should be in such a buoyant market."