The UK has been highlighted as having one of the world's worst profit margins in Turner and Townsend's International Construction Market Survey 2021.
That will not come as a great surprise to anyone involved in construction. It has been the case for a long time. Many put the (still) adversarial nature of the industry down to the supply chain, from main contractors onwards, seeking to compensate for low profit margins by making claims once they are engaged. Profit margins can also rapidly diminish or disappear during the course of a project. Even if such claims are legally dubious, many work on the basis that if made some mud may stick and aid negotiations, particularly as developers seek to avoid costly formal disputes.
The pressure on profit margins is even greater in the wake of Covid and Brexit. That is before considering how the industry should respond to the climate change agenda and who should bear the cost.
Dare I say it funders and developers may need to take the lead in promoting more sustainable development in every sense of the word!
UK ranked as ‘worst major market for profit margins’ 22 JUL 2021 BY MARK SMULIAN CREDIT | Didier Madoc Jones of GMJ and City of London Corporation