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IN DEPTH

HS2

Margins remain a concern for the ground investigation market

Growth in demand in the ground investigation sector in 2013 and expectations for a buoyant start to this year have failed to be matched by a rise in margins as developers continue to lower the cost of construction.

ESG managing director Philip Ball has said the investment at the ground investigation stage could reduce overall costs and called for the procurement process to focus on customer value rather than price.

“While no price improvement is evident across the board, and margins remain tight, we believe the focus needs to be around creating customer value as opposed to procuring on price as a primary mechanism,” he said.

“Ground investigation has long been an undervalued element of the development and construction process and perhaps will continue to be so. The money spent on investigation and testing could be reaped many times over on some projects, but it is so often detached from the final product that there is no obvious link for the buyer of our services. Only well-informed clients buy on value rather than price.”

Ball added that while he expect the market to by buoyant this year, growth has been slower than anticipated so far but added that there are a number of high profile opportunities in the pipeline. “We have already seen positive patches of improvements, though other areas continue to be more challenging - especially the South East and London,” he said. “We remain confident that the market, in general, will deliver on expectations but as an industry we need to address certain challenges – namely resource and price.”

To find out more about the prospects for the ground investigation market, why not attend GE’s inaugural Ground Investigations and Laboratory Testing conference on 29 April. More details can be found at www.geinvestigations.co.uk

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