Supply delays fall by 13 percentage points for construction firms, finds survey

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3rd February 2022 15:23 - Construction

Supply delays fall by 13 percentage points for construction firms, finds survey: A report by IHS Markit, has uncovered a decrease in the number of supplier delays in the construction sector, from 47% in November (2021) to 34% in December (2021).

The questionnaire of around 150 construction firms also showed that around 5% of firms had shorter lead times among vendors, an increase from 4%. The report suggested that the fewer delays contributed to the slowest rate of input price inflation since March 2021.

Furthermore, the survey revealed that 51% of those polled are forecasting a rise in business activity in 2022, with only 9% predicting a decline. While signalling confidence for the year ahead, the level of optimism was the joint-lowest reported since January 2021.

Customer demand was resilient in December, found the survey, with the latest rise in new order volumes being the strongest since August. This was despite the new Omicron variant of Covid-19 potentially delaying decision-making. Strength in consumer demand has led to 19 consecutive months of new work being recorded.

Employment opportunities appear to remain strong in the sector with survey respondents commenting on the need for extra staff as part of new project starts and long-term expansion plans. This has been helped by a rebound in construction orders.

Prices in construction continue to be pushed up by the costs of energy and raw material prices, found the survey. However, this being said, the overall rate of inflation eased for the fourth month running.

Tim Moore, Director at IHS Markit, said: "The worst phase of supplier delays seems to have passed as the availability of construction products and materials continued to turn a corner in December. While suppliers to the construction sector have caught up on backlogged work and boosted capacity, there were still widespread reports citing unresolved transportation issues and driver shortages.”

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