15th April 2014
SME construction suppliers cutting rates to win work
SME suppliers are cutting their rates to win work, but is this really necessary and how is it affecting the construction market?
Despite the fact that the construction industry is one of the few sectors benefiting from a relatively speedy post-recession recovery, three quarters of SME suppliers are still lowering their rates in order to win work. While there is a lot of talk of construction companies benefiting from the recent growth figures, more than half are yet to actually feel the benefits of any economic upturn in the industry, a survey by ConstructionOnline has revealed.
94 per cent of suppliers said that cost is the most important thing for their clients when it comes to choosing a supplier, which is why they are doing all that they can to lower their prices to attract more business. All the while, material costs have been increasing over the last 12 months. The construction industry might seem as though it is progressing well, but higher outgoings and lower returns are resulting in seriously challenging times for construction industry SMEs. Although there is an increasing amount of work coming their way, SMEs are struggling to compete due to competitive pricing, and many are resorting to ‘suicide rates’ as a result. Struggling SMEs should be doing all they can to remind their clients that – just because the price is lower – doesn’t mean the service is of value.
Contract managers can benefit from construction accounts software complete with intelligent job costing modules, enabling them to choose jobs more wisely by calculating the cost of materials and contractors before accepting the contract. Job costing software can also be used to access important financial information instantly to see where businesses can afford to drop their prices, simultaneously saving time managers can subsequently use to focus on improving areas of the business. If you’d like to find out more about the benefits Integrity Software can provide, explore our website or get in touch with a member of the team today.
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