Cost worries outweigh Covid, as contractors reflect on 2020 and the year ahead

Our new Construction Sector Insight Report takes stock of sentiment and commercial perspectives after a unique and incredibly challenging year and reveals a stark reminder of the cost pressures facing the sector, even during a pandemic.

Over a two-month period at the end of 2020 and early 2021 we invited feedback from over 200 contractors from a wide range of organisations, to provide an opportunity for reflection on lessons learned, and to support contractors in 2021 with a shared understanding of where they have landed after such a unique time.

Despite the pressures that Covid has inflicted on the market, respondents pointed to the enduring challenge of driving down costs while delivering a raft of programme obligations as their number one concern, with 42% of respondents stating that it is the biggest industry pressure, followed by Covid at only c20%.

Caroline Romback, Copper Construction Practice Director comments; “Of all the statistics from the report, this one puts everything into sharp relief. For contractors to point to cost pressure outweighing the impact of Covid, it’s a stark reminder that the sector is still treading a tremendous commercial tightrope. There is a genuine ambition to modernise, but equally a need for that risk and added valued obligations to be built into the cost of delivering a project.”

Despite a strong momentum towards that sector modernisation, contractors reflect on a balance of risk that still sits with them, as expectations expand faster than margins. And with an expanded list of added value obligations, contractors also call for earlier engagement in project programmes.

Unsurprisingly of that expanding range of obligations Sustainability sits at the top of list, closely followed by Social Value, Modern Methods of Construction (MMC) and Engagement. In the report contractors reflect on the opportunities and challenges that each of these obligations bring, as the Government steps up in areas like Social Value delivery, with an increased level of prescription in its new Social Value Model.

Caroline Romback concludes “On the flip side it was a year of tremendous hope and achievement in the sector as well. And with agendas like the Construction Playbook and Project Speed, there could be a unique moment to harness collective momentum to make change on both sides of the negotiating table to truly help us all ‘build back better’ together.”

To download and view the Construction Sector Insight Report, please click here.