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Uncertainty affecting the UK construction sector

06 May 2022

Ian Cooper, Director and Head of Construction at DWF, comments on the latest S&P Global / CIPS UK Construction PMI  data. 

Ian said:

"The data shows the continuing trend of increasing sector activity, yet confidence is heading in the opposite direction as a result of uncertainty. 

"Costs are increasing dramatically with some suppliers only guaranteeing the price for 24 hours. With construction's already poor reputation for constraining costs, we now have a situation where costs are guaranteed to rise. The question is how much? The answer is nobody knows.

"Construction investors will have to take risks, or delay decisions until the market stabilises. However, we know from experience that the construction industry is very capable of accepting these uncontrollable factors in pursuit of turnover.

"The use of contract fluctuations, not seen since the 80's is now a real mitigation option in play.  However, could now be the time to grab workload? With inflation rising, rates of interest increasing and market confidence on the wane, it could be a great opportunity to negotiate an order book on favourable terms."

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