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February 2023 - Construction

45% of construction industry experts believe their companies will grow this year: A survey of professionals working in the construction industry has found that 45% are feeling confident about the coming year and are expecting their companies to grow, despite the economic forecast.

The survey of 1,300 experts by the Access Group polled respondents with a range of job titles including estimators, quantity surveyors, operations managers and finance leaders, and sought to look at the prospects of the construction industry over the next 12 months. It also sought to highlight any common issues faced by respondents and looked at technology and attitudes towards new technologies available to the sector.

The report highlighted that according to the Office of National Statistics, the UK construction sector (comprising 9% of the UK’s GDP) is in the process of recovering from the severe hit caused by the Covid-19 pandemic.

It however also stated that new work levels are below the levels recorded in 2020 (0.3% -- equating to £29 million).

While 45% are positive about the year ahead, 30% believe their company will not see any significant change, while just 2% are forecasting that their company will 'significantly shrink'.

How will the economy impact business?

When asked about how they predict the state of the economy will impact their business in the next 6 to 12 months, eight in 10 (79%) said they are expecting a 'negative impact' (20%, a 'significant' negative impact and 41% 'moderate' negative impact), whilst just 5% are forecasting a positive impact (2% - a significant positive impact and 3% a 'moderate' positive impact). In addition, 14% are expecting a 'slight' positive impact.

Asked to rank the issues that will likely affect the industry over the next 12 months, respondents pointed to 'time-consuming estimation processes', an 'excessive amount of time spent on reporting' and 'trouble controlling labour costs' as their leading barriers to productivity and profitability. Other challenges highlighted (ranking in order) included 'manual input of data and dealing with manual errors', 'keeping on top of cash flow', lack of visibility on financial health of suppliers and customers' and a 'lack of access to material and plant buying history'.

When asked about the challenges they expect to  see worsen over the next year, the top answer given was a 'lack of visibility' (both internal projects and suppliers) , 'keeping on top of cash flow' and 'time-consuming processes', including reporting and estimating project costs and demands.

Debt

When asked questions around debt, 63% said that bad debt was a 'moderate' to 'severe' risk to their businesses with 23% saying their bad debt has increased over the past 12 months. Six in 10 said it has stayed the same, while 16% reported a reduction.

Read further insights from this survey here

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