Nine out of 10 contractors quizzed by Gleeds said that they or their supply chain had declined a tender in the past three months due to onerous contract conditions and lack of capacity.
Nearly 40% of respondents said that they were having difficulty securing enough bidders for tenders.
Confidence in the government’s commitment to invest is also in lacking, with just 13% of those quizzed believing that the National Infrastructure and Construction Pipeline recently published by the Treasury and Infrastructure & Projects Authority will actually be delivered. High construction inflation and elevated costs putting the squeeze on budgets were cited as the primary barriers, followed by the impact of planning delays and legal challenges.
Gleeds chief executive Graham Harle said: “Despite lingering uncertainty in the market, there are signs of a gradual improvement in the overall landscape. The number of contractors telling us that projects had been adversely affected by insolvencies fell from 54% to 30% in the latest survey, for example, and we’ve also seen cautiously optimistic stats coming out…in recent weeks.”
He added: “We must prepare for an upturn and ready ourselves to deliver a substantial investment pipeline that will be crucial for transitioning towards a net-zero future and building resilience in our public services, energy and infrastructure.”
The slowdown in activity over the preceding six months does appear to have led to an easing of labour-related pressures, resulting in the lowest number of respondents reporting issues with labour supply since the survey began in 2021, at just 15%. But long-term shortages promise to prove more problematic, Gleeds found. Two-thirds of those questioned think it will be nearly impossible for the industry to recruit and retain enough people to plug the widening skills gap as the sector haemorrhages UK construction workers, with the departure of more than 300,000 since 2019.
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