Blog

31st January 2022

Is stability returning to the construction industry?

The January forecast by the Construction Products Association (CPA) that 2022 and 2023 will see more sustainable levels of growth will be welcome news to many in the construction industry.

The trade organisation reported that construction output grew by 13.3% in 2021, which reflects the bounce-back from 2020's strange pandemic-affected market conditions. But it should be a one-off, they predict, with output set to return to more normal levels of 4.3% this year and 2.5% in 2023.

After a couple of years dealing with Covid-related lockdowns, staff absence, material shortages and project delays, the prospect of a more stable market will be welcomed with open arms. But before we celebrate and relax, we must all still be extremely vigilant for many months to come because the impacts from the recent turmoil will take a while to resolve.

Still no legal protection for many

The sector is still suffering difficulties and disputes because of the uncertainty around who takes responsibility for the impacts of the pandemic - and, more importantly, who pays. It still means that contractors and sub-contractors of all kinds have no legal safety net to fall back on, mainly because the legislation and contracts we worked to before Covid were not compatible with the kind of delays and increased costs that we've all experienced.

Why it will take a long time to get back on track

At the risk of casting doom on some long overdue positive light, we must bear in mind that there is still a way to go to get to something resembling 'normal'.

Whilst many product manufacturers and merchants are reporting better stock levels for materials, there are still many difficulties in the supply chain which will certainly continue to have an impact on the delivery of contracts throughout this year.

And apart from the obvious delays on site that material shortages cause, they can lead to financial pain if the contract terms do not allow for additional claims. Already in January we have seen the price of structural steel jump by £50 per tonne and Forterra bricks set to go up 10% in price with further increases planned during 2022. Inflation like this can be extremely damaging and turn a profitable contract in a loss-making nightmare.

Supply chains are usually global too. This means that normality is unlikely to return until every major country relaxes or ends pandemic restrictions and gets its economy back to full output. Regardless of what we are doing in the UK, if the world's major economies are still hindered our construction industry will suffer.

So to answer the question 'how long will it take to get back to normality?', none of us can say with any certainty. That means we must all continue to protect our interests as best we can!

Three ways contractors and sub-contractors protect themselves

1. Take a close look at your contract

What does your contract commit you to and does it sufficiently protect your interests? The effects of the pandemic have reinforced the need to make sure you have the right contracts in place with your employer or client.

2. Know your reporting mechanisms and deadlines

Make sure you deliver the contract in line with agreed reporting procedures and ensure you submit any claims by the agreed deadlines.

3. Don't rely on goodwill ore casual verbal agreements to protect you

Contractual paperwork and dealing with formal agreements may not be everyone's cup of tea, but it is worth investing a bit of time and effort in making sure you have whatever you are agreeing to in writing.

Get specialist help with your contract administration

It is easy to overlook contracts and deadlines when you are busy delivering projects for clients or employers. If you are pressed for time, tasks like checking a contract before signing and trying to remember how to submit a claim through the agreed channel will slip down your priority list.

This is where Quantum can help. We help contractors and sub-contractors get it right at a cost that won't break the bank through a complete package of contract support services - our Bundle of Services.

This includes a service for everything from Contract Vetting, where our contract specialists check your contract before you sign it (flagging up any issues before you commit) to a Retention Fund Management service to make sure your retention money doesn't go up in smoke after you've finished on site!

For a no-obligation discussion and a fixed price quote for our services, please call us on 0161 974 6655 or email .

RICS member logo, providing Quantum CPM clients with independent assurance on the quality of our services
Chartered Institute of Arbitrators (CIArb) member logo, the professional body for dispute avoidance & dispute management
Society of Construction law member, supporting its aims to promote the adoption and understanding of construction law