Collaboration in construction as the sector enters a more inflationary and recessionary economic cycle.​

Background

An article in the Sunday Times Business section of the 7th August, 2022, (www.thesundaytimes.co.uk/business) titled ‘Brickies Go To The Wall As Prices Rip Through Construction’ poses a difficult but not unfamiliar time for the Construction sector as the country enters a more inflationary and recessionary economic cycle. Briefly, the article highlighted the following main points are:

• Output in the sector shrunk for the first time in a year and a half;
• Prices have shot up due to post-covid 19 Supply Chain disruption;
• Restructuring firms are seeing more firms seeking their help;
• There has been a rise in company using company voluntary arrangements (CVAs) to renegotiate unprofitable contracts;
• Some firms in the sector are taking jobs that will lose money, a behaviour that was the undoing of Carillion in 2018;
• Some firms will pitch for projects at below cost and then try to beat up the clients to get the extra to break even; In such a febrile atmosphere, it is not unusual for firms to squeeze suppliers to protect margins;
• Big firms in the sector have recorded huge profits but that does not apply to SMEs; and
• Without SMEs making money the Government will never meet it’s target of building 300,000 homes a year (SMEs reported employing around 80% of that 2 m employed in the sector).

The survey

The above points were sent out to a database of people who had attended Constructing Excellence and partner webinars over the last two and a half years in an email along with an invite to complete a short survey.

The Survey comprising of 5 questions was sent out twice to this database on the 9th and 10th of August, 2022 with the results comprising of the feedback given on those two days.

The Results