On your marks, get set, go!

As autumn approaches, it seems appropriate to check-in and see how the year is panning out. Were 1Q 2023 forecasts accurate or did they miss the mark?

The monthly European Business Construction Survey provides contractor insight. Despite ongoing challenges, small market improvements — especially in materials pricing — have brought stability back to Spain, Italy and Portugal, thus increasing their overall confidence rating since January. Materials cost increases challenge Germany and France as overall confidence rates decline. Germany has even started to see some developers file for insolvency as new pricing and interest rates become impossible to take on.

But the industry has not come to a stop in our Gleeds Europe offices. Time and time again, the European construction industry proves its resilience and will surely emerge triumphantly from recent challenges. While Italy and Spain see continued activity in the hospitality, retail and data centre sectors, Portugal has similar results, adding industrial and logistics project activity to the list.

Portugal’s EU Recovery plan focuses heavily on renewing logistics infrastructure by improving roads and electrical charging stations. And while securing electricity for data centre projects has become challenging in some countries, Portugal is enjoying its moment in the sun as a top destination for developers.

Although immediate workloads are faltering, long-term prospects are strong thanks to the demand to strengthen energy security, transition to net zero carbon and adapt to changing societal needs. In countries where work expectations are declining and contractors are welcoming all opportunities, early partnering to optimise buildability and costs could answer many of the problems developers face.

With a well-thought-out procurement strategy, projects can navigate supply chain challenges and labour shortages to reach the finish line successfully. Slow but steady wins the race.