Fears are mounting that the industry has not experienced the worst of the material delays, the Gleeds report warns | news

Signs that construction companies have yet to experience the worst materials shortages in the industry are mounting as more than three-quarters of respondents to a Gleeds survey expect delays to worsen over the next three months.

About 77% said the scarcity will worsen in the next quarter as global demand continues to outpace supply.

The consultant’s summer UK market report also found that 80% of contractors had problems providing materials and products for their projects in the first three months of this year.

And 84% of more than 300 respondents to a Gleeds survey on LinkedIn last month said the bottlenecks are delaying their projects.

It follows warnings from the Construction Products Association that material and labor shortages are unlikely to improve significantly over the next six months and are now the “main barrier” to construction growth.

Gleeds’ report also found that the number of contractors reporting problems finding labor had increased from 17.5% in the company’s spring report to 44%.

ONS data shows that vacancies rose more than 16% in the most recent quarter, driven by demand from ongoing infrastructure projects, according to Gleeds.

The shortage was also compounded by an exodus of EU workers during the pandemic, with London losing 54% of its EU workers by the end of last year.

Data from Hudson Contract suggested the squeeze could have increased average profits in the capital by 4.5% in May alone.

According to the government, around 10% of construction workers were still on leave at the end of June.

But despite the report highlighting the pressures affecting the industry, Douglas McCormick, executive director of the Gleeds Group, said that after the onset of the pandemic, there is still a feeling that construction is “accelerating”.

Half of those surveyed said that posting opportunities increased in the last quarter, while 48% said they expect an increase in the next three months.

The report also allayed fears of a terminal decline in office construction, with Gleeds saying the sector remains busy as clients propose projects to repurpose their workplaces in anticipation of staff return after the summer.

But the sector still lags behind others in terms of confidence, with the housing sector topping the list of expectations for tenders.

About 47% of respondents said they expect residential jobs to increase in the next quarter, followed by 41% who said public sector work will increase and 33% for infrastructure.

While construction production fell 0.8% in May, it was still 0.3% higher than in February 2020 on the eve of the pandemic, although new work was 3.5% below pre-Covid levels.

However, while GDP in the economy as a whole grew 0.8% in May, it was weaker than expected as material shortages across all sectors were blamed for the slowdown.

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