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Construction industry faces challenges

14 September 2022

Construction industry faces challenges

The Construction Leadership Council’s (CLC) latest Construction Product Availability Statement contains a somewhat sobering statistic. 

The year to June recorded the highest annual level of insolvencies amongst UK construction firms since the financial crisis of 2008, despite strong demand throughout the first half of the year.

In the statement, John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the CLC’s product availability working group, say that “The key risk going forward, given the substantive rise in insolvencies, is to what extent sharp cost rises and slowing demand over the next six months will exacerbate the rise in insolvencies.”

Assessing the future outlook, they report that price inflation remains the biggest issue for the construction industry and further significant increases in inflation are anticipated due to energy, raw material and labour cost rises.

They believe that, while the UK government’s recent announcement of a six-month energy price cap for business users will help manufacturers here to some degree, the risks around supply and cost of energy threaten manufacturing throughout the EU.  

“While EU policy-makers wrestle with their own solutions, the possibility of factory shutdowns on the continent may lead to shortages of products, materials and components exported to the UK,” the CLC states.


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