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Difficulties with the Construction Supply Chain – Is there evidence to suggest the worst has passed?

The last few months of supply chain issues have certainly not been isolated to the construction industry but few others have perhaps felt the impact so profoundly as a combination of increased demand and squeezed supply has put pressure on projects. However, despite continuing concerns surrounding the supply of goods and materials, the latest figures produced by HIS Markit and the Chartered Institute of Procurement and Supply (CIPS) for October suggest the worst may be over. The report states there has been a 23 percentage point drop in the number of companies reporting longer supplier delivery times – now at 54% of companies as opposed to 77% in June. But does that mean we have seen the last of these supply chain difficulties?

Given over 50% of construction companies continue to be impacted by these delays, it would seem to be unlikely. In addition to this, The Construction Products Association (CPA) forecasts in its own report that supply issues are likely to continue affecting the industry into 2022, with not enough capacity in the chain to enable demand. The CPA’s report also highlighted other issues in the sector including increased costs due to rising energy prices and transport availability, in addition to the lack of raw materials.

As a result, while it seems that perhaps the worst has passed, the lack of certainty in the supply chain continues to be an on-going problem. It has therefore never been more important for businesses to ensure they continuously review the health of their supply chain to ensure measures (both practical and contractual) are in place to protect themselves wherever possible.

“The construction sector has had every challenge thrown at it this year and yet in the face of this ongoing volatility there is still huge demand for projects.”