Join the digital revolution — we need you!

It was a mixed forecast in our spring (2Q 2023) report, with better-than-expected economic performance and settling materials price inflation improving construction industry confidence — however, challenges such as cost escalation, scheme viability and labour availability hampered output and future activity.

These pressures remain. Respondents to our summer (3Q 2023) survey ranked interest rates and inflation as the greatest threat to the industry, with investor confidence and materials and labour cost escalation also noted as concerns for many.

Caution remains in the market — 95% of contractors said they or their supply chain had declined a tender, up from 78% in our last survey. Over half said this was due to the project's proposed tendering and contract conditions and risk profile, with 40% citing a lack of capacity.

Cost of living challenges continue and August’s Monetary Policy Committee meeting saw the base interest rate increase to 5.25% for the first time in 15 years. Over 90% of respondents to our recent survey said that inflation is affecting the viability of projects and over three-quarters said that the continuing challenges are impacting growth of the construction industry.

Fewer than two in ten respondents expect the government to improve market conditions and ultimately increase sector output. Thinking about an upcoming election and how a new government could improve the industry, respondents ranked the top three areas for focus as addressing labour shortages and shrinking the skills gap, incentivising land purchases and development and refining payment practices.

However, with over 60% of contractor respondents feeling that the industry has little or no influence on government, it must take action for itself. Adopting digital approaches, including artificial intelligence and data analytics, increasing collaboration and acting to attract a more diverse workforce will help improve project outcomes and efficiently use resources.

July saw Project:Hack 19 — for which Gleeds was the headline sponsor — bringing together approximately 250 attendees to solve industry challenges, such as using blockchain to try to develop workable smart contracts. Innovation and collaboration will help to futureproof the industry and are critical for the industry to thrive.

Recently, built environment professional bodies have embraced the digital revolution, which is vital to ensure the principles are immersed in training to lead the transformation. The Joint Contracts Tribunal (JCT) announced in July the long-awaited publication of an updated suite of contracts in 2024, which will see the embedding of gender-neutral language, championing of digital working and updates to reflect the Construction Playbook.

All great progress; now let’s accelerate!