Insolvency in focus
In the two and a half years since COVID-19 arrived in Britain, UK construction has endured a rollercoaster ride in demand, supply and project risk and opportunity.
Lockdown-era delay pressures and schedule overruns have given way to soaring input costs and intermittent availability of key materials, first as global demand rebounded and then as the war in Ukraine disrupted international supply chains.
But hopes that surging cost inflation would be the final sting in the pandemic’s tail now look premature, as recessionary clouds gather over the UK economy and the construction industry sees the unwelcome return of an all too familiar spectre – insolvency.
This edition of the UKMI brings mixed tidings in reflection of the marked variance in differing economic indicators. While our analysis finds that inflationary pressures are likely to peak this year before subsiding in 2023, supply chain stress – and the disruptive threat of contractor and sub-contractor failure – is growing.
Furthermore, the inflationary and insolvency threats are increasingly intertwined. Tackling them together will require a pragmatic approach to project and programme delivery.
At a glance
Real estate tender price inflation forecast for 2022.
the amount yearly construction cost growth has increased above tender prices in Q1 2022
increase in construction insolvencies in Q2 2022 when compared to Q2 2021
© 2022 Turner & Townsend