Industry Preview 2010: Contracting -- Olympics and renovations raise hopes but pricing remains tough

While grounds maintenance firms are being forced to diversify to compete for work, landscape contracting businesses believe there could be some positive opportunities in the months to come.

Association of Professional Landscapers vice-chairman Mark Gregory said commercial work such as the Olympics was helping the industry and forecast that renovations of office buildings would throw up business.

"There will be a lot of refurbishment work and that will include landscaping to help encourage new tenants in," he predicted. "New business start-ups are increasing, which is a positive sign."

Feeding into that sector, Palmstead Nurseries marketing and sales manager Nick Coslett echoed this view. "The commercial landscaping side is starting to pick up, but that is restricted by money supply," he said.

He continued with a warning on large projects: "I don't want to be too pessimistic, but the economy is very fragile and the banks could still go under again, plus there are election-year jitters."

But Hillier Landscapes managing director Richard Barnard said he had seen a swing in the work his firm was carrying out towards public sector work, which made him believe businesses would have to diversify in 2010 to find whatever work they could.

Two £500,000 schemes won in the past week had given him optimism, he revealed. "Our order book has changed completely," said Barnard. "We have swung right over to the public side and really any established company has to think outside the box."

BALI technical director and senior contracts manager at Ground Control Neil Huck remarked that the market was getting more difficult as more facilities management companies began to compete for grounds maintenance work.

"Diversification will have to happen," he said. "Prices are going to stay the same or drop and everyone is after a better deal. Contracts will increasingly cover not just parks or grounds maintenance but street cleaning, graffiti, gritting and more."

Grounds maintenance firms would also need to keep a close eye on how the implementation of the Sustainable Use Directive and regulation on plant protection products would impact on their work, added Huck.

BALI national chairman Richard Gardiner said: "With regards to grounds maintenance, I hear of local authorities and facilities management firms demanding the same service for up to 20% less, so times are tough.

"History suggests that as many if not more businesses fail on the way out of recession than they do going in or during. Many contracting businesses are under capitalised due the low barriers to entry into the market and this is where I believe many will come unstuck."

 

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