黑洞社区

Willmott Dixon has pledged to engage more closely with its suppliers in an effort to stem rising tender cost inflation.

Speaking exclusively to 黑洞社区, John Waterman, the newly appointed chief operating officer of the group鈥檚 拢800m-turnover construction business, said the firm is working to 鈥渒eep our supply chain close [to] improve innovation and efficiency鈥�.

Waterman, who assumed his new role last month, said the construction division realised it needs to 鈥渄rive efficiencies with members of the supply chain鈥� to mitigate 鈥渁dded cost鈥� from suppliers whose order books are filling up.

He argued the firm鈥檚 鈥渆xtremely strong ethic of paying our supply chain promptly鈥� would give it a competitive advantage in the market when securing suppliers.

Waterman, who was previously managing director for Willmott Dixon鈥檚 regional activities in south London and the southern Home Counties, said he was 鈥渉ugely energised鈥� by the role of leading Willmott Dixon鈥檚 construction business.

He said he expected the division鈥檚 growth to slow in the coming years to 鈥渂etween 2.5-5% growth annually鈥� and profitability would be constrained due to rising supplier costs, adding: 鈥淲e don鈥檛 see any major increase in margins.鈥�

Waterman said he was encouraged that 鈥渁ctivity is spreading from the South-east to the rest of our business鈥�, highlighting Manchester and Cardiff as cities enjoying a particular upswing in activity.

Waterman鈥檚 comments on cost inflation came as construction group Mace revised up its tender cost forecasts for 2015 again this week.

Mace now expects tender cost inflation this year in the UK of 4.5% and in London of 5.5%, both up 1% from its last set of forecasts in the autumn.

However, cost consultant Alinea last week downgraded its 2015 forecast for tender cost inflation to 4.5%, down from 5%, citing a clearer development pipeline picture and political uncertainty in the UK and Europe as factors keeping costs under control.