Nearly two thirds of contractors (65%) plan to incorporate a greater percentage of modern methods of construction (MMC) into their projects as a result of the covid-19 pandemic.
That’s according to the autumn 2020 market report, Holding Steady, published by consultant Gleeds.
Gleeds noted that the construction industry had adopted a collaborative approach to keep things moving, with the adoption of innovative construction approaches such as MMC and maximising the use of digital tools to ensure the cost-efficient shutdown and reopening of sites.
Contractors have found alternative ways of working in response to social distancing measures, with 72% of contractors who responded to a Gleeds survey saying their site productivity was now back to 80-100%, with 94% expecting levels to hold steady or increase, notwithstanding another national lockdown.
Some 39% of respondents to the Gleeds survey found that tender opportunities had decreased over the last quarter, with 67% of them expecting tender opportunities to remain at the same level or decrease further over the next period.
The survey also found that 64% of tender returns were “roughly” on budget, with the remaining returns under budget (18%) and over budget (18%). Gleeds said there was some evidence of competitive pricing for schemes that are due to start soon and have a quick programme.
For more complex projects or those with a longer programme, a wider range of returns are being seen as contractors assess materials and labour costs against decreased demand. 64% of contractors who responded said that they are seeing supply chain movement on previously agreed prices where projects have been delayed or postponed. 78% of contractors said that disruption to the supply chain is resulting in shortages of key materials and giving rise to price increases.
Contractors were also asked to rank the acceptability of different procurement and tendering routes in the current market. A negotiated route came out top with a score of 96%. That was followed by two-stage design and build at 78%, single stage traditional at 55%, management contracts also at 55%, and single-stage design and build at 43%.
The report concluded: “The construction industry has demonstrated great resilience over the past quarter, with a notable increase in levels of collaboration to keep developments of the UK’s urban centres moving forwards.
“As we head towards the end of 2020, flexibility, adaptability, collaboration and innovation will continue to be key watchwords to help the construction industry navigate choppy waters.”
To view the full report, click here.