Fisherman Mike Posted June 3, 2011 Report Share Posted June 3, 2011 The industry I work in (Construction) is a dead man walking at the moment and the sun on the horizon seems to be dipping fast rather than rising…Subcontractors are ringing daily searching for work opportunities and none of the Architects or Surveyors have much if anything in the pipeline. House building is continuing but nothings being bought or sold, the young can’t get mortgages and the bottom of the housing ladder is well and truly ******. DIY group Focus are in receivership as a result of the lack of confidence and the stagnation in the housing market. Many of the Multi National Contractors are muscling in on lesser markets that they would not normally consider, buying work for turn over just to keep the shareholders happy and crippling smaller regional Contractors. The Governments ( if you can call it that) plan for the Private sector to step in when the Local and Health Authority capital budgets were slashed has failed miserably, as any one with any knowledge of the industry said it would and things are looking very, very gloomy for hundreds of thousands of Construction Employees. I reckon within the next few weeks or months one or two of the really big players in the Industry are going to fold and by this time next year unemployment will be at levels we have never seen in this country before. Quote Link to comment Share on other sites More sharing options...
Highlander Posted June 3, 2011 Report Share Posted June 3, 2011 and you want us to shed a tear for... BUILDERS! :yp: Quote Link to comment Share on other sites More sharing options...
CZ550Kevlar Posted June 3, 2011 Report Share Posted June 3, 2011 I work for a large consultancy company, they were contractors but they re-branded themselves into a consultancy, since then they have gone after every contract going and if they don`t have the skilled staff they buy a company with the staff and go in so low on price they always win. Before i transferred into this company i worked for another consultants and they were the same just slightly less cut throat. The industry is never going to be the same as the early days. Quote Link to comment Share on other sites More sharing options...
al4x Posted June 3, 2011 Report Share Posted June 3, 2011 Its interesting FM I'm in transport and its ok at the moment not great but hanging on. That said we do sub some work and a few of the larger players have recently folded that we used to use, its been a long time with people hanging on waiting for things to improve with no real signs of hope on the horizon. Building round here is in a similar state with most new developments on hold, mortgages are an absolute joke though which is the issue. I've just finally got mine sorted for a new house purchase and the agro was unbelievable bearing in mind putting 100K down and it being 3.5 times earnings it took 2 months to organise with that in mind how any first time buyer gets onto the first rung is beyond me. Whats interesting is the higher end houses round us are selling well, last one I sold was a good size and reasonably expensive and sold in a week. I think we are in for a period of pain but no one except Gordon Clown believes we can really keep borrowing to spend our way out of the situation. You just have to look at Ireland to see the construction situation could be far worse. Quote Link to comment Share on other sites More sharing options...
charliebrown Posted June 3, 2011 Report Share Posted June 3, 2011 Im in the same game as you Mike, last month was our best ever and this month has started resonably well despite the school hols. Most of the lads I deal with are going strong with quite a few turning work away. They are mainly smaller builders and Landscapers though, I know a lot of the big boys are struggling, and can understand why when they dont even bother trying to squeeze us down on price. Must admit im quite confident of a good year all round. Quote Link to comment Share on other sites More sharing options...
SXPhil Posted June 3, 2011 Report Share Posted June 3, 2011 I was made redundant just before Christmas as my company folded due to rising debt and no work as an accountant I had always worked with Construction I am now in the education sector earning less than 50% of what I was earning before Quote Link to comment Share on other sites More sharing options...
Vipa Posted June 3, 2011 Report Share Posted June 3, 2011 The industry I work in (Construction) is a dead man walking at the moment and the sun on the horizon seems to be dipping fast rather than rising…Subcontractors are ringing daily searching for work opportunities and none of the Architects or Surveyors have much if anything in the pipeline. House building is continuing but nothings being bought or sold, the young can’t get mortgages and the bottom of the housing ladder is well and truly ******. DIY group Focus are in receivership as a result of the lack of confidence and the stagnation in the housing market. Many of the Multi National Contractors are muscling in on lesser markets that they would not normally consider, buying work for turn over just to keep the shareholders happy and crippling smaller regional Contractors. The Governments ( if you can call it that) plan for the Private sector to step in when the Local and Health Authority capital budgets were slashed has failed miserably, as any one with any knowledge of the industry said it would and things are looking very, very gloomy for hundreds of thousands of Construction Employees. I reckon within the next few weeks or months one or two of the really big players in the Industry are going to fold and by this time next year unemployment will be at levels we have never seen in this country before. Absolutely rubbish mate (well, from a mortgage perspective.) Picked up a little bit at the beginning of the year but then fell back and has gone VERY quiet again... still a lack of money, as you quite rightly say, for first time buyers. It's the amount of deposit they need that's causing the problem. Kids (sorry, young adults) just don't have 15/20/30 grand available for a deposit and whereas, once upon a time, quite often parents would step in and stump up the cash, they just haven't got it to give themselves any more. What we need are a few lenders moving to lend 95% instead of the 85-90% max at the moment. That was always where it sat pre 2000 and worked well. Unfortunately, the FSA have placed such high capital adequecy requirements on lenders who want to go above 85% that it makes it uneconomical to do it, so, it will likely never happen again! Thankfully, people still need protection/insurance (well... apart from Al4x that is ) and so that is the prime focus of my business now and has been since the SHTF. Still only earning probably a third what I was 3 years ago! Quote Link to comment Share on other sites More sharing options...
Vipa Posted June 3, 2011 Report Share Posted June 3, 2011 Its interesting FM I'm in transport and its ok at the moment not great but hanging on. That said we do sub some work and a few of the larger players have recently folded that we used to use, its been a long time with people hanging on waiting for things to improve with no real signs of hope on the horizon. Building round here is in a similar state with most new developments on hold, mortgages are an absolute joke though which is the issue. I've just finally got mine sorted for a new house purchase and the agro was unbelievable bearing in mind putting 100K down and it being 3.5 times earnings it took 2 months to organise with that in mind how any first time buyer gets onto the first rung is beyond me. Whats interesting is the higher end houses round us are selling well, last one I sold was a good size and reasonably expensive and sold in a week. I think we are in for a period of pain but no one except Gordon Clown believes we can really keep borrowing to spend our way out of the situation. You just have to look at Ireland to see the construction situation could be far worse. Slightly worrying that Labour have moved ahead in the polls too :look: If the Coalition crumbles we may well see them back in power! 2 months Alex!!! why oh why didn't you talk to me? I wouldn't have tried to sell you any critical illness cover........ honest! Quote Link to comment Share on other sites More sharing options...
Fisherman Mike Posted June 3, 2011 Author Report Share Posted June 3, 2011 and you want us to shed a tear for... BUILDERS! :yp: Actually yes.... The UK Construction Industry has an annual turnover of more than £100 billion and accounts for almost 10% of the country’s GDP. The industry employs some two million people in more than 250,000 different companies. It is five times the size of the aerospace industry and more than three times the size of the automotive industry. The construction industry is fundamental to the country’s economic and social development. Improved transport infrastructure and modern efficient buildings play a major part in lifting the productivity of businesses in the UK. At the same time improvements in social housing, schools and hospitals, as well as the provision of high quality public transport, all depend on the construction industry delivering successful projects. But if you wanted to send me a cheque in lieu that would be acceptable Quote Link to comment Share on other sites More sharing options...
al4x Posted June 3, 2011 Report Share Posted June 3, 2011 because I had a lifetime offset tracker at .89 above base with no fees so didn't want to let it go Probably a slight reason they tried to find any excuse not to honour it Quote Link to comment Share on other sites More sharing options...
Vipa Posted June 3, 2011 Report Share Posted June 3, 2011 because I had a lifetime offset tracker at .89 above base with no fees so didn't want to let it go Probably a slight reason they tried to find any excuse not to honour it I'll give you that one Quote Link to comment Share on other sites More sharing options...
Scully Posted June 3, 2011 Report Share Posted June 3, 2011 (edited) Traditional builders are thriving around my part of Cumbria(a lot of wealthy folk in the Lakes)but Timber frame(Tradis panel type) ahs died a death. Edited June 3, 2011 by Scully Quote Link to comment Share on other sites More sharing options...
oscarsdad Posted June 3, 2011 Report Share Posted June 3, 2011 I am lucky as I work in the defence industry so there is always a need for our equipment...selling quite well at the moment. Mortgages are difficult, I am just buying my first house and luckily I have enough saved & have the help of my parents to have over £30k deposit but even that is only just enough to get a house in the areas around me and I will then be paying £1000 a month for the mortgage! How anyone who is on average wages is supposed to be able to buy a house I do not know...and houses are predicted to go up 16% over the next 5 years so hopefully I have times it right! Quote Link to comment Share on other sites More sharing options...
Highlander Posted June 3, 2011 Report Share Posted June 3, 2011 Why then is it that house prices are still so high? In any other ‘industry’ a collapse would mean that prices adjusted accordingly so why not in the housing market? If house prices dropped (and mortgages became a bit easier to get although I don’t think we should return to the 95%+ situation of before) surely it would have at least a twofold effect; first time buyers might have a chance and there would be more availability. I guess everyone is so scared that if prices did drop they’d be in **** street because their mortgages are too inflated! PS. around here small, high quality builders are very busy. The usual crop of wasters are in the pubs bemoaning that they've no work! :o Quote Link to comment Share on other sites More sharing options...
KFC Posted June 3, 2011 Report Share Posted June 3, 2011 Absolutely rubbish mate (well, from a mortgage perspective.) Picked up a little bit at the beginning of the year but then fell back and has gone VERY quiet again... still a lack of money, as you quite rightly say, for first time buyers. It's the amount of deposit they need that's causing the problem. Kids (sorry, young adults) just don't have 15/20/30 grand available for a deposit and whereas, once upon a time, quite often parents would step in and stump up the cash, they just haven't got it to give themselves any more. What we need are a few lenders moving to lend 95% instead of the 85-90% max at the moment. That was always where it sat pre 2000 and worked well. Unfortunately, the FSA have placed such high capital adequecy requirements on lenders who want to go above 85% that it makes it uneconomical to do it, so, it will likely never happen again! Thankfully, people still need protection/insurance (well... apart from Al4x that is ) and so that is the prime focus of my business now and has been since the SHTF. Still only earning probably a third what I was 3 years ago! Sorry if I'm being a bit too simplistic but if the price of a house is more than people can afford then surely the answer is to drop the price of houses to a level that people can afford rather than increase the level of debt. That's what caused the problem in the first place? Quote Link to comment Share on other sites More sharing options...
vampire Posted June 3, 2011 Report Share Posted June 3, 2011 I am a small builder and have full order books,but all the work is carried from last year,which is good as the number of inquirys this year is well down to the extent that i have had maybe 4 as opposed to being able to book at least 6 months work from easter inquiys alone. Always makes me mad when people knock builders,during the miners strikes when so many lost their jobs,did anyone hear that more builders lost there jobs/homes etc than the miners did. The only way forward is to get the first time buyers on the ladder then it all starts to move,give help to the smaller builder as this section as a group is huge,cut the vat on home improvements and lock up the cash in hand builders AND the customers for promoting it,stop employing cheap labour from abroad,make it easier for the small builder to employ people. Quote Link to comment Share on other sites More sharing options...
Vipa Posted June 3, 2011 Report Share Posted June 3, 2011 Sorry if I'm being a bit too simplistic but if the price of a house is more than people can afford then surely the answer is to drop the price of houses to a level that people can afford rather than increase the level of debt. That's what caused the problem in the first place? No, what caused the problem was lenders handing money to people with no income whatsoever (yes... really... the US called them NINJA mortgages, No Income No Job Applicants.) lending money to people with clear track records of not paying it back as well as lending on 'self certified' mortgages where the prospective borrower didn't need to provide any proof of earnings! you want a house that costs £250k, you need a £250k mortgage, you work out what you needed to 'show' on the application form as income to achieve this and no questions were asked!!!! this was quite common practice (not with my client base I might add, there was no need for it, my clients tended to come from pit villages so house prices were within the reach of 'normal' incomes, there was never any question of inflating them but it was rife elsewhere. Anyhoo... as you can imagine, it is these loans that start to default as the borrowers simply do not have the resources to sustain the monthly payments. All this was done with no risk to the lender as all of those mortgages were securitized (bundled up into mortgage backed securities and sold on to other financial institutions for huge profit) and as such, the risk went with them... This practice went on for years. As long as the big financial intitutions were making a profit. (as the property bubble grew... but it wasn't real! If you get chance to watch Wall Street 2, not a great film really but, in it, Gordon Gekko gives a little heart to heart advice and talkes about the Dutch Tulip Bulb Bubble from a few hundred years ago... It makes what has recently happened obvious and understandable) Because it wasn't real growth though, it was only a matter of time before the whole thing collapsed... Leheman Bros were the first casualty, they basically ran out of cash and couldn't pay the wage bill and it was at this point other financial institutions began questioning what they had bought for billions and slowly realised that, in fact, they were sat on nothing more than a big pile of dog **** mortgage backed securities, a large proportion of which would very soon default and leave them in the poo themselves... no one at this point would buy them and therefore thier market values tumbled sending rather a few of these giants to the wall. selling high loan to value loans causes negative equity problems as was seen (particularly in the midlands) during the last recession when the last property bubble burst. We haven't really seen any negative equity issues this time. As long as the risk is managed and the lending is sound, LTV is largely irrelevant. 95% mortgages have been around since the early 80s and before. They never caused any issues and the banks took out insurance policies, MIGs (Mortgage Indemnity Guarantees) to ensure they weren't left in the lurch should a high LTV loan default. In the recent crash, even though the media would have you believe that Northern Rock were the root of all evil and that it was thier 125% lending policy that caused the crash, in reality, it was just poor risk management, nothing more and in NRs case, the run on the bank caused solely by the media was more to blame with that particular banks demise than anything else... It is not high LTV lending that causes defaults, it is the inability or unwillingness of the borrower to repay the debt. Quote Link to comment Share on other sites More sharing options...
dan-250 Posted June 3, 2011 Report Share Posted June 3, 2011 My industry engineering is slowly getting steadier, we build confectionary wrapping machines, at the start we was booming as we refurb second hand machines as no one could afford to buy new, but this is even drying up, over time has been cut off but still on a 6 day 45 hour day I think we should go to 5 but keep the hours. But in the pipeline theres another 3 year contract coming in from america, so we have about manages through Quote Link to comment Share on other sites More sharing options...
cant hit rabbits 123 Posted June 3, 2011 Report Share Posted June 3, 2011 My industry (well, its not that industrial), classic car restoration, is going well. We have had too many orders for our tiny little barn/workshop to cope with and may have to move to somewhere bigger. My boss (a builder, running this restoaration business as a paying hobby with me in tow) is now considering abandoning building and concerntrating on the cars full time. We produce every part we need our selves, so its turning out to be an enjoyable and profitable business. I like being a part time mechanical engineer! Quote Link to comment Share on other sites More sharing options...
CZ550Kevlar Posted June 3, 2011 Report Share Posted June 3, 2011 Sorry if I'm being a bit too simplistic but if the price of a house is more than people can afford then surely the answer is to drop the price of houses to a level that people can afford rather than increase the level of debt. That's what caused the problem in the first place? If you drop the price of houses to an affordable level then you put thousands into negative equity when houses were purchased at the peak of the property market circa 5 years ish ago. Quote Link to comment Share on other sites More sharing options...
Fisherman Mike Posted June 3, 2011 Author Report Share Posted June 3, 2011 Why then is it that house prices are still so high? In any other ‘industry’ a collapse would mean that prices adjusted accordingly so why not in the housing market? If house prices dropped (and mortgages became a bit easier to get although I don’t think we should return to the 95%+ situation of before) surely it would have at least a twofold effect; first time buyers might have a chance and there would be more availability. I guess everyone is so scared that if prices did drop they’d be in **** street because their mortgages are too inflated! PS. around here small, high quality builders are very busy. The usual crop of wasters are in the pubs bemoaning that they've no work! :o House prices have dropped substantially in the last 5 years... However they are never going to drop lower than the cost of building them ! To develop a 30 k plot with 3 bed semi is going to be (all up including servicing the plot) about 175k around here including land cost. Material prices and new technologies to reduce the CO2 footprint are pushing building prices onward. However you are right in respect of the value of some properties, these are worth far less than Estate Agents value them at and in the last 10 years these Estate agents have artificially inflated house prices. The funny thing is a lot of them are members of the RICS but really know absolutely jack **** about building costs. Quote Link to comment Share on other sites More sharing options...
Fisherman Mike Posted June 3, 2011 Author Report Share Posted June 3, 2011 I am a small builder and have full order books,but all the work is carried from last year,which is good as the number of inquirys this year is well down to the extent that i have had maybe 4 as opposed to being able to book at least 6 months work from easter inquiys alone. Always makes me mad when people knock builders,during the miners strikes when so many lost their jobs,did anyone hear that more builders lost there jobs/homes etc than the miners did. The only way forward is to get the first time buyers on the ladder then it all starts to move,give help to the smaller builder as this section as a group is huge,cut the vat on home improvements and lock up the cash in hand builders AND the customers for promoting it,stop employing cheap labour from abroad,make it easier for the small builder to employ people. Well said. Quote Link to comment Share on other sites More sharing options...
stevies400 Posted June 3, 2011 Report Share Posted June 3, 2011 My industry engineering is slowly getting steadier, we build confectionary wrapping machines, at the start we was booming as we refurb second hand machines as no one could afford to buy new, but this is even drying up, over time has been cut off but still on a 6 day 45 hour day I think we should go to 5 but keep the hours. But in the pipeline theres another 3 year contract coming in from america, so we have about manages through I have worked on a few endoline box machines in the past. Your rite tho the engineering game is picking up steadily. A lot of work going on over in ireland so i hear. Quote Link to comment Share on other sites More sharing options...
stevies400 Posted June 3, 2011 Report Share Posted June 3, 2011 Well said. Well, Well said. Cheap labour isnt the answer. An employer i worked for hired a foreign worker and told me he was like a mechanical man! Only for a week or 2 then he was demanding more money equal rites or he was going to take him to court! Quote Link to comment Share on other sites More sharing options...
Imperfection Posted June 3, 2011 Report Share Posted June 3, 2011 My industry is outdoor advertising.Its an odd buisness because in a recession it gets hit first,but is the first one to come out the other side. Im always busy so am positive about the future. Quote Link to comment Share on other sites More sharing options...
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