Home News Increasing workload raises spectre of tender inflation and skills shortages

New research from cost consultants Gleeds has revealed growing optimism from the industry post-Covid as nearly two thirds of contractors questioned report an increase in tender opportunities over the past quarter, and over 70% expect this trend to continue into the next. This marks a shift from Q1, when less than a quarter of contractors quizzed claimed to be anticipating an uptick. However there are warnings about increasing tender prices and potential skills shortages.

As a result of increased confidence in the market and an influx of projects being tendered, 88 percent of respondents expect tender prices to increase. Pressure on materials was also thought to play a key role in pushing prices up, with 80% of contractors reporting that they had experienced issues with the supply of materials in the early part of the year. Many of those asked believed this was down to a combination of factors, however the global pandemic and the impact of Brexit were cited as the biggest influences.

Graham Harle, chief executive at Gleeds, said: “With a vaccine roll-out happening at pace and increased opportunities coming forward, there is definitely a sense of the construction industry lifting. The publication of the government’s ‘build back better’ plan for growth outlined capital spending plans worth £100 billion, aiming to create new jobs, improve productivity and support the levelling up agenda — demonstrating that construction is at the heart of the UK’s economic recovery. Whilst the outlook for construction is definitely more positive, challenges remain. The effects of the pandemic are still being felt, particularly regarding materials, and there are still concerns that labour shortages may be felt later in the year as workload increases.”

While continued materials challenges topped the list in terms of threats to the recovery of the industry going forward, the survey revealed that further waves of Covid-19 were the second largest concern for construction professionals. The ramifications of the past year’s restrictions are likely to be long-lasting, with over half of respondents preparing for an increase in contractual disputes as a result of fluctuating timelines for project completion in the wake of the pandemic.

When asked about life after Covid, 75% said they expect to see an increase in home working, with 69% also anticipating a rise in flexible work patterns and reduced need for ‘in-person’ meetings going forward. These shifts could change the way in which new buildings are designed, with 55% believing we will see more flexible spaces developed to meet the demand for improved work/life balance. This would certainly appear to be the case, with 81% already finding a greater emphasis being placed on wellness at the design stage of new projects.

 

Leave a Reply