Even though the recession is officially over, suicidal pricing persists across the UK.
Parts of the UK demolition industry are starting to resemble those lost Japanese soldiers that continued to fight WWII alone on remote Pacific islands, blissfully unaware that peace had been declared decades earlier.
For while the UK economy has been officially out of recession for more than a year now and large swathes of the country are enjoying or anticipating a demolition upturn, the suicidal bidding that became so entrenched in the darkest days of the downturn still persists.
This, in itself, is a learned lunacy and flies in the face of the demolition industry’s traditional “make hay while the sun shines” mantra. Indeed, the sector’s traditional role as an early indicator of financial wellbeing has been replaced by a “first in, last out” mentality that has left it isolated in the recessionary doldrums.
That, however, is only a part of the problem. Allied to the low bidding is a willingness to take on work today that would have been dismissed and disregarded just a few years ago: contracts that are too small to warrant the “big company” approach; contracts that are too far from home to be economically viable; contracts that are outside a company’s comfort zone.
Perhaps the biggest issue facing the business today, however, is an impaired speed of response, so oddly reminiscent of an ageing boxer that has fought a few times too many.
Costs for fuel, insurance, materials and site security are all on the rise, and January is traditionally the time for a hike in small tool hire prices. And with Speedy Hire – industry leader and arbiter – currently staring down the barrel of a financial investigation, you can rest assured there WILL be a hike. These price increases are being felt even by those demolition companies that HAVE reacted to the positive upturn; those same price increases could prove to be terminal for those that persist in low pricing.
It is now unusual for a day to go by without a phone call or email at Demolition News Towers prophesising the imminent demise of one demolition company or another. While we have learned to treat much of this as speculation, devilment and mischief making by competitors or disgruntled former employees, some of those prophecies are starting to ring true. If the rumour mill is to be believed, there are at least three big name demolition firms teetering on the brink right now; and those are just the ones we know about.
Unless the industry wakes up and embraces the upturn, we fear that number could grow.
