By Ryan Gilluley

IN normal circumstances the construction industry is a bellwether sector for the wider economy and it’s not difficult to work out why. When homes, offices, factories, and roads are being built, it’s the most visible sign of confidence in the economy because people are funding their construction for others who are willing to pay to live in them, use them or employ people to work in them.

But circumstances are nowhere near normal, and they haven’t been for some time. Just as the effects of Brexit are starting to kick in, the stop-start impact of the Covid pandemic has made predictions about the health and even the direction of the construction industry – and the wider economy – extremely difficult to make.

Just as new figures appeared to show signs of shortages of materials easing, Omicron emerged, threatening to scupper any progress made in unblocking supply chain bottlenecks.

Added to that are soaring energy costs – with warnings that fuel bills could rise by 50% by the spring – which have contributed to inflation rising to levels not seen since the start of the 1990s.

However, those forecasts don’t take account of measures that can be taken by the industry or government to assist.

Business resilience and continuity plans are more developed than they were at the start of the pandemic, allowing companies across the supply chain to work through the imposition of restrictive measures with less disruption.

Last year companies were hampered by the triple whammy of fuel supply, lorry driver shortages and supply chain delays while also dealing with the impacts of Covid, Brexit and labour shortages.

Many have learned from the experience and put in place contingencies to ensure those factors can be dealt with more efficiently and expeditiously.

As costs for fuel, energy, labour, and materials rise, bidders are altering their commercial assumptions, insisting on more flexible change control provisions in contracts, with clearer and more detailed clauses that reflect the potential for external factors to cause disruption and delay.

Amid this uncertainty, cost consultants are proving their worth by providing valuable insights into likely market rates and supply trends as well as offering advice on cost-saving and adding value to projects.

Governments are playing their part with the commissioning of public sector infrastructure projects and long-term housebuilding targets.

Ministers at Westminster and Holyrood have long championed small-to-medium sized enterprises (SMEs) enjoying a greater share of public procurement business but this needs more urgent attention.

It’s clear from research and anecdotal evidence that SMEs find the public procurement process challenging and many need additional support with bid submissions.

Given its importance to the economy, the construction industry is monitored and used as a gauge of how the wider economy is performing and the message, we should be sending out is that the future can be a lot brighter than current statistics suggest.

Ryan Gilluley is managing director of GCM Ltd, a Lanarkshire-based firm of cost consultants, claims and disputes experts for the construction and engineering sectors.