G&T’s latest Main Contractor Survey revealed a host of insights on the current state of the UK construction market. The contractors that responded to our survey are among the most time-served and financially secure construction companies trading.
Some of the highlights from our latest report include:
- Typical Overheads and Profit (OH&P) have dropped for all but the highest value projects. The prospect of cooling demand and market activity has seen contractors become more flexible with their controllable costs in order to win work
- Project Labour and general lack of skills is probably the biggest challenge the industry is facing, and there is no quick fix. There continues to be a significant cost premium to secure certain skilled trades and staff roles
- Lower energy costs and softer demand have helped ease material price inflation. The overall supply picture has improved significantly in 2023 and product availability has mostly returned to pre-pandemic levels, helping lead times to stabilise
- Most trades continue to experience a degree of moderate cost pressure, largely driven by labour shortages. However, later trades (ie façades and M&E) are facing the greatest inflationary pressures and availability issues
- Contractors continue to be selective in their bidding activities, but an uncertain growth outlook has encouraged a greater tender submission rate as contractors seek to secure pipeline and turnover
- Market tendering conditions have cooled since last year. Fewer bidding opportunities have led to a greater willingness among contractors to consider a variety of procurement routes, but many remain wary of being caught out by further price spikes