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Piling contractors hit as housing market plunges

Piling contractors were this week facing bankruptcy and redundancies as the dramatic slowdown in the private housing market has plunged the industry into crisis.

Specialist contractor Roger Bullivant said it was consulting its 1,000 plus staff about possible redundancies. It denied reports that as many as 150 staff could lose their jobs.

Another piling contractor Piling Solutions has entered administration and will go into liquidation unless a buyer is found.

A statement from Roger Bullivant said that the dramatic fall in the number of house starts had left the firm faced with the prospect of having to cut staff.

Its announcement will send shivers down the spines of contractors involved in the later stages of housing development.

"Due to a significant downturn in the market, many house-builders have had to postpone works on sites," said the Bullivant statement.

"Despite our efforts over recent weeks, our costs have not changed significantly.

"We are intending to commence a process of consultation with employee representatives to consider if redundancies can be avoided and, if that is not possible, reduce the number of redundancies and mitigate the impact of them. We would stress that no decisions have yet been made."

At Suffolk-based contractor Piling Solutions 30 of its 50 staff have already been dismissed by the Ipswich-based administrator Ensors.

Ensors administrator for Piling Solutions Steven Law said the contractor's French parent company Spie Fondations had been soaking up losses but had had enough.

"The short to medium term view was that its not going to get much better, therefore Spie were being asked to put more money into the business."

He added that the contractor would finish work on two outstanding contracts after which the 20 remaining staff were likely to be laid off unless a buyer for company could be found.

"Whether they will be kept on depends on whether the company can be sold," he said.

"There have been lots of expressions of interest for the business but it is always difficult to sell a business in construction. It certainly seems to have a lot of experience in terms of personnel and the company appears to have had a good name in the industry.

"The future depends on how decisions go with interested parties, but if they are unsuccessful we will certainly not be taking any new work on and will have to make further cuts."

As the crisis deepens for piling contractors, newly published materials sales figures paint a depressing picture.

The Construction Products Association (CPA) reported that in the second quarter of 2008 there was a sharp decline in sales of heavy materials used by the piling industry.

"It's quite stark how much the sales of heavy materials used at the start of the construction process have declined," said CPA economics director Noble Francis.

"Current sales of heavy materials are more than three times lower than this time last year and expected sales for the coming quarter are four times lower than this time last year."

Meanwhile, the Royal Institution of Chartered Surveyors (RICS) UK construction market survey shows that construction workloads are falling at the most dramatic rate since 1995.

"Workloads have declined at the fastest pace in the survey's history reflecting the nationwide downturn in housing market activity," said a RICS spokesman.

The survey also shows that employment levels in the construction industry as a whole were falling for the first time in 10 years, raising the spectre of further job losses in the industry.

"Confidence in workloads has reached the lowest level in the survey's history," added the spokesman.

Click here for: Heavy construction materials sales index

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