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The latest Market Report from construction consultancy Gleeds suggests the government is failing to instil widespread optimism amongst construction professionals, as fewer than half of those quizzed said they feel positive about the future of the sector.

The figure shows a drop in confidence when compared to the 70% who believed that the industry was a priority for the Labour party when it was elected last year. In its manifesto, Labour pledged to ‘get Britain building again’ but progress has been slow, and a lack of clear direction has left many feeling frustrated, Gleeds reports.

Interest rates and inflation remain the biggest perceived threat to growth, closely followed by supply chain capacity, investor confidence, and the impact of continuing global unrest. As insolvency figures begin to dip, however, the report found that just 15% of those questioned had been involved with a project impacted by company collapse over the quarter, despite the industry continuing to experience the highest number of businesses going bust in the year to July, making up around 17% of all cases.

Meanwhile 45% reported that they or a member of their supply chain had refused a tender in the previous three months, down from 80% this time last year. When asked about proposed legislation banning retentions and introducing fines for late payments, more than a third said they believed such a move would further improve supply chain resiliency.

Commenting on the findings, Gleeds UK managing director Brian McArdle said: “Our Market Report shows a fragile but gradually stabilising picture of construction under a Labour government. The sector continues to come under strain from insolvencies, inflation, and labour pressures, but opportunities do exist in public housing, healthcare, education, infrastructure and commercial – success will depend on converting government spending commitments in these areas into real project delivery, while safeguarding supply chain resilience.”

In Gleeds’ Q2 survey, 37% said that their projects had been held up by the Building Safety Regulator process, with many raising concerns that it was a major threat to project delivery and cost management. In the wake of announcements that the BSR would move from the Health & Safety Executive (HSE) as part of a wider package of reforms, that figure has fallen to 25% this quarter, however some noted that the process is still having a significant impact on residential schemes in London in particular.

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