Regional pressure points
Fears of the unknown around government investment and global trade are biggest concerns of contractors
Our key findings
1st & 2nd
ranked concerns among contractors are factors likely to impact construction pipelines:
- Spending Review and Budget
- Trade wars
3rd & 4th
ranked concerns among contractors are centred around security:
- Security of payment
- Robustness of supply chains
5th & 6th
ranked concerns among contractors are ‘known’ factors:
- Reduction in interest rates
- Regulation changes
“A shrinking pipeline of opportunities is causing some contractors to chase work – a race to the bottom. The risk of further high-profile and supply chain insolvencies is increasing.”
Large main contractor
What it means for projects
Concern among contractors is greater in the regions over the impact of the government’s Spending Review and the coming autumn Budget. Early contractor engagement for public sector projects alongside pipeline notices may alleviate some concerns.
Security of payment is a bigger concern in London where projects may need to work harder to demonstrate funding sources or even provide some form of security. Behind the numbers, larger contractors are more concerned over the robustness of supply chain, where failures may have bigger consequences.
What it means for client outcomes
Clients are likely to achieve better procurement outcomes if contractors can focus on those outcomes rather than underlying risks and concerns.
Clearly, external market factor risks are beyond the control of all parties, but fairly allocating risks that are in the team’s control may allow more time to focus on client outcomes rather than managing risk.
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