Contractor says it expects inflation to go through 10% barrier later this year

Mace has said it is paying some of its smaller subcontractors every couple of weeks to help them get through the squeeze on cashflows.

Last month Sir Robert McAlpine said it had moved some of its supply chain onto weekly payments so concerned is it by the threat of subcontractors being unable to ride out rocketing labour and materials costs.

Mace has now said it has also moved some of its suppliers onto shorter payment times, making fortnightly payments, instead of waiting 29 days 鈥� the average time it takes to settle its bills.

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Source: Tom Campbell

Gareth Lewis is expecting inflation to breach the 10% barrier in the coming months

The firm鈥檚 construction chief executive Gareth Lewis said: 鈥淐ash is so important for smaller suppliers, we鈥檝e got to keep them moving. They pay their labour weekly and they need the cash regularly. We鈥檙e only as good as the quality of our supply chain and how they deliver for us. You have to look after them or they will go somewhere else.鈥�

Lewis said he believed inflation would continue to rise in the coming months.

鈥淭here鈥檚 more to come between now and the autumn, it鈥檚 going to be with us for the next six to 12 months,鈥� he added. 鈥淚n the short term, it will get worse and we鈥檒l see [inflation at] 10%.鈥�

And he added that clients were having different attitudes when it came to negotiating a revision of costs on deals already signed.

鈥淪ome clients will say no, some will say 鈥榤aybe, put a case forward鈥� and others will say 鈥榟ow can we help?鈥�. It鈥檚 not in clients鈥� interests for us to do badly, it鈥檚 not in our interest for the supply chain to do badly. This is a team game and if we can all work together, take a bit of pain on the way then we鈥檒l get through it.鈥�

McAlpine chief executive Paul Hamer previously told 黑洞社区 the firm had never had to resort to weekly payments during his five years at the business.

He said: 鈥淭he supply chain is our number one concern at the moment. Over the next six months we鈥檒l be paying very particular attention to the state of the supply chain. We鈥檝e got to be very careful and we need to help each other.鈥�

Last week, T&T said it expected inflation in London to run at 9.5% this year while Aecom has said that its worst-case scenario for inflation in the capital this year was 12%.

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