CONTRACTORS are remaining selective about taking on new projects, with almost 90% saying they or their supply chain had declined a tender in the previous three months.

This is the the top line finding of the latest report from property and construction consultancy Gleeds. Onerous contract conditions and lack of capacity are converging to create bidding barriers. Nearly 40% of all respondents say they have difficulty securing a sufficient number of tenderers for projects this year.

Struggle to Attract Bidders

Confidence in the current government’s commitment to invest is also in short supply. Just 13% of those quizzed believe that the National Infrastructure and Construction Pipeline recently published by the Treasury and Infrastructure and Projects Authority will 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.

Graham Harle, Gleeds CEO

Gleeds CEO 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 from the likes of S&P in recent weeks.”

“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,” he went on to add.

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%.

Long-term shortages promise to prove more problematic, however. Two-thirds of those questioned think it will be near impossible for the industry to recruit and retain enough people to plug the widening skills gap. This is as the sector haemorrhages UK construction workers, with the departure of more than 300,000 since 2019.

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