The latest market report from international property and construction consultancy Gleeds reveals that rising labour and materials prices continue to threaten growth in the construction sector. Over three quarters of contractors questioned said they had seen further increases to labour rates in the preceding quarter, and nearly 70% reported continuing volatility in materials prices.
The ongoing escalation of costs was cited as the biggest threat to the industry, with 77% of contractors believing that growth is suffering as a result and around a third of all respondents warning that recession will do further damage going into 2023. Issues around availability of labour also persist, with 60% of contractor respondents experiencing problems , however almost half of all of those quizzed were optimistic that concerns around the availability of materials were beginning to settle.
Gleeds CEO Graham Harle said of the survey, “Our report reveals that spiralling costs of materials and labour show no signs of abating, although there is some hope that availability of both is stabilising compared to the previous quarter. It seems inevitable that the turbulent political backdrop will impact investor confidence, and the prospect of a recession has led to predictions of a decrease in tender opportunities going into Q4. Productivity remains high, though and the teamwork we’ve seen on projects to combat these challenges has continued to increase, with over 80% of those we surveyed experiencing greater collaboration on schemes.”
The consultancy’s report also found that a massive 91% of respondents believe the government should be doing more to support retrof itting measures and energy performance, with 64% of non-contractors and 47% of contractors reporting that clients themselves are giving greater consideration to both on projects. Meanwhile, 82% and 69% respectively said that projects are also increasingly incorporating futureproof ing measures such as flexibility for change of use or easy renewal of components.