Market Intelligence Reports
Latest Market Intelligence Report: Q4 2023
Market conditions are becoming more predictable, but supply chain insolvencies continue to rattle the industry.
Every quarter SCF Main Contractors gather market intelligence from the construction industry directly from the trade supply chain. Data for this report has been formed from over 150 subcontractors from across the south of the UK. Consultants from SCF Consult share valuable insight towards their monitoring of the construction market and provide supporting commentary on the returned data.
Regardless of high interest rates and rising building costs, 2023 has resulted in relatively stable market conditions when compared with the past year, providing project teams with improved predictability for their projects.
In Q4 tender workload increased by an average of 1.6% across all trades. The trades with the largest increase include:
- Groundworks 10.4%
- Concrete Frame 7.1%
- Brickwork 4.6%
Although seeming relatively conservative, tender workload has continued to increase over recent years, with a 4.2% increase in Q4 when compared with the same time last year.
The news comes as the ONS reported that while new work in the sector was 30% down compared with Q4 2022, repair and maintenance has remained buoyant, increasing 0.4% in December 2023 and 4.0% in Quarter 4 (Oct to Dec) 2023. Private New Housing was cited as a significant contributor to this decline due to a reported drop in demand derived from high mortgage rates.
Nevertheless, outdated cost plans and legacy budget setting has still caused affordability challenges throughout the year, with many schemes having to utilise redesign and additional funding to progress to site. Building cost was still on average 6.5% greater in Q4 when compared with the same time last year.
The trades with the largest increase in building cost in Q4 were:
- M&E 4.7%
- Brickwork 4.6%
- Dry Lining 1.1%
Supply chain resilience continues to be a significant issue, particularly amongst SMEs and specialist firms, where unsustainable levels of risk and unfavourable payment terms continues to stress the supply chain resulting in a high number of insolvencies.
As the construction industry aims for continued stabilisation, the new year may bring a buoyant political landscape. With a general election currently due to be held in the Autumn, the construction sector will have to wait to see the impact this has on future funding across sectors in the built environment.
At present, material availability is not expected to be a problem, with trade subcontractors forecasting no change in average material lead time for the year. However, SCF Main Contractors are looking to closely monitor shipping activity in the Middle East following recent political instability as this will likely impact trade routes.