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Civil engineer secures £800,000 deal - but warns over sector recovery
Updated 2:43pm Wednesday 23rd July 2014 in Business
A CIVIL engineering boss has warned of a continuing stifled industry, despite his firm securing an £800,000 deal to improve a busy North-East road link.
The Owen Pugh Group is carrying out earthmoving work on the A174 and A19 junction close to Thornaby, near Stockton.
The project, overseen by Costain for the Highways Agency, includes dualling the route and adding extra lanes to a roundabout.
However, John Dickson, Owen Pugh Group chairman, told The Northern Echo although the sector feels better than last year, selling price pressures and increased work in the South are still shackling companies’ growth.
He said: “This work is part of a major project under the Pinch-Point Programme to improve traffic flow and it’s excellent for us to work on such a high profile project.
“However, although better than last year, this year is still not seeing a return to what might be called healthy conditions in the general civil engineering industry.
“There is a bit more work around, and schemes like the A174 and A19 improvements are in evidence across the region.
“But it takes time, and is taking time, to get larger schemes going.
“The outlook for the medium to long-term is reasonably good, but that for the moment at least, here in the North-East, the civil engineering industry is not seeing what you would call a recovery.”
The Owen Pugh Group employs about 360 North-East workers, with its headquarters in Dudley, Northumberland.
Last year, its construction and civil engineering business secured a £2.3m deal to build an ash processing plant at recycling firm Sita UK's Haverton Hill site, near Stockton, which will handle up to 200,000 tonnes of ash every year.
However, Mr Dickson, who is also a North-East Civil Engineering Contractors' Association board member, warned companies are facing skilled worker shortages, with costs rising as the South produces more work.
He added: “Contractors are generally reporting they are all busy tendering for a lot of work, which may turn into high contract workloads, and we can see a number of larger schemes starting on the ground during 2015.
“But competition for contract work today is still intense, indicating there’s not yet enough to go round.
“That means contractors are still seeing downward pressure on selling prices.
“At the same time, increased workloads in the South are pushing input costs upwards, and there are signs of shortages in skilled workers across some occupations.”
At the start of the year, Owen Pugh invested £900,000 to strengthen its civil engineering division, moving its Owen Pugh GDC subsidiary into a depot in Blaydon, North Tyneside, to take on more workers.
The GDC division carries out drainage, flood alleviation and regeneration work for local authorities and water utility firms.
They added the move would also enable its HCS Drain Services division, in Stockton, to create a new hub, aimed at maintaining and attracting further work across Tyneside and Northumberland.