I wasn’t expecting it. I had a ring round of some long-standing contacts that I speak to fairly regularly.

I guess I last spoke to them a couple of months ago, as things were starting to look a bit stickier with the figures heralding a dip in construction output.

My chat with them yesterday was a shock.

“We are seeing jobs won at 1991 prices,” I was told.
The world had changed dramatically in that short time. I was thrown back to conversations I had have not had since the nastier days of the early 1990s.

They seemed less shocked than I was, perhaps because I naïvely thought that “New Construction” would eschew the outrageous panic-driven mistakes of the previous recession.

The picture of the construction industry today that I was given was this:

• Work in many sectors is drying up
• Fear is spreading
• Trust is evaporating
• Bid lists are lengthening
• Frameworks are cracking or being ignored
• Dutch auctions are back
• Subbies and suppliers are increasingly prepared to bid below cost at “suicidal” prices
• Provisions for on-site management and health and safety are being squeezed
• Subcontractors are being asked to cut prices by anywhere from 10 to 40%, by value engineering, reducing the spec or by any other means

I didn’t hear anything about spurious claims made against subcontractors to kick them off site, so the work can be rebid at a lower price…Yet.

What was even more surprising was that this “retro” behaviour is happening within the world of blue chip clients and contractors in non-residential construction, many of whom will have espoused the virtues of Egan-Latham “new thinking”.

On the face of it, it would seem that under pressure all the valuable work undertaken within the construction industry to improve itself since the 1990s recession is unravelling.

Now I admit I haven’t documentary evidence to back any of these claims up, just that the sources are various and they have always proven to be reliable.

What is more, it was me not them that was most outraged. Being old stagers they almost expect this sort of thing.

I had initially called them to get a feel for how banks are treating small and medium sized construction companies.

Analysis of late payment for the Contract Journal Construction Top 100 had pointed to how much money was owed by and to construction firms.

It showed just how much cash smaller firms needed to fund the work they undertake. In these risk-averse times if banks start taking a much tougher line it will not be just the financial services industry that grinds to a halt.

Now put all the above in the light of the added twist of a credit crunch and we have a cocktail more potent than we faced in the 1990s.

True the construction industry has the Construction Act to help stamp out the practice of non-payment and the smart firms are prepared to use it.

The trouble is too many subcontractors and suppliers are worried to use it in case they offend their clients.

All I need to hear now is that firms are desperately diversifying in fright at market conditions and I will be able to tick off all five of my top five mistakes to make in a recession