Construction sector facing weakness across the supply chain
Posted: Tuesday, December 5th, 2023
According to surveys conducted throughout the construction supply chain, the sector experienced a decline in activity during Q3 of 2023. Heavy side and light side manufacturers experienced sales declines, while chartered surveyors saw their workloads decrease. Small and medium-sized contractors, as well as civil engineering contractors, also saw their net workload balances weaken. The surveys revealed that forward-looking questions all pointed to a deteriorating backdrop for the next year. Concerns over demand strength, tighter financial constraints due to raised interest rates, and a decrease in new enquiries – including in sectors that had previously driven construction activity – were all noted. Additionally, construction costs continued to rise, outpacing increases in tender prices and reducing profit margins. CPA also notes that the UK economy is expected to flatline throughout 2024, holding back the recovery in major sectors of construction activity such as new build housing and repair, maintenance and improvement (rm&i) to 2025.
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