It’s a well-known fact that the construction industry is suffering from a shortage of both materials and workers as the industry recovers from the pandemic – and we’re now starting to see it affect public sector construction contracts.
Figures from the Office for National Statistics (ONS) and Purchasing Managers Index (PMI) show that, while construction is one of the fastest-growing industries after 2020’s shutdown, a lack of materials and workers to fulfil contracts is holding back growth.
Sales rose
33%
Profit declined
23%
What are the experts saying?
For several months, the Construction Leadership Council (CLC) has been warning of materials shortages, with its latest statement confirming the crisis. Brexit pressures have added to the problem, with the industry relying on imports for a number of crucial materials.
The latest CLC statement confirms:
“Timber, roof tiles and some steel products continue to be in short supply, as is bagged cement which may have been impacted by some manufacturers undertaking overdue preventative maintenance… Paints, sealants and chemical products, continue to be affected by raw material shortages… Plasterboard has been subject to extended lead times with one major manufacturer indicating their products going on allocation. Some regions are also reporting delayed deliveries of bricks and blocks.
“Electrical products have been affected by raw material shortages, particularly steel products and semi-conductors, since Autumn 2020.”
How the materials shortage is affecting the public sector
With a strong pipeline and commitments to many projects across the public sector and growth in the private sector, a materials shortage could halt work in its tracks.
This has been coupled with the latest statement on labour supply from the ONS. The current demand for construction workers is at a near 20-year high with 33,000 job vacancies in the sector. The skills crisis in the construction sector has been spoken about for a long time and the industry is still struggling to bring young people into the sector. Together with Brexit pressures on the industry, there is a huge gap in personnel to implement projects.
How you can take advantage
If you’re a supplier of any of the above raw materials or even labour – and are not actively pursuing construction contracts in the public sector – there’s a huge opportunity to get involved. Sign up on our contract finder for free to see construction contracts currently out to tender in your local area.
Latest market information tells us that there are many opportunities for SMEs across the public sector. Local government continues as the most active sector, followed by central government & education.
Activity between 5th and 11th July shows that 35% of contracts were for less than £100,000 ‒ clearly indicating a continued opportunity for SMEs throughout the public sector.
Market activity suggests there is a strong future pipeline for public sector work, meaning a huge opportunity for construction suppliers – so register with S2G to keep your eye on upcoming opportunities.
If you’ve never worked with the public sector before, now is the time to get into the market.