KPMG survey finds shortage of qualified suppliers is employers’ single biggest challenge

Construction clients believe that the likelihood of delivering projects on time and within budget could be compromised by a lack of qualified contractors, according to KPMG’s 2007 global construction survey.

KPMG surveyed senior executives of companies with a combined forward construction spend of £35bn in the next five years. Forty per cent said it was increasingly difficult to find qualified suppliers, particularly contractors. Sixteen per cent said the shortage of qualified contractors was the biggest challenge they face in executing construction projects.

The report said: “The overwhelming conclusion is that the shortage of qualified contractors is the biggest challenge to construction projects in the future.”

It added that 60% of clients prefer to employ large contractors because they believe they are more likely to attract talented workers and subcontractors, and be more reliable.

Of those surveyed, 57% chose quality of people, reputation and expertise as the most important factors in choosing a contractor. Only 12% said price was a contributing factor and less than 10% chose delivering the project on time.

Owing to pressure on a finite pool of resources and the substantial rise in construction expenditure in the next five years, (predicted by 39% of respondents) 42% of clients said it would become harder to meet demand.

In terms of fraud, 20% of respondents admitted that they knew of internal or external fraud surrounding the delivery of recent projects, which may be another reason why clients are keen to use brand-name contractors that they feel are well known enough to be trusted. But despite this, 74% said they were confident their company has sufficient controls to detect and prevent fraud in procuring capital assets.

£35bn Amount of money respondents plan to spend on construction in the next five years

40% said shortage of qualified contractors posed a real problem

57% said quality of people and reputation was most important when choosing a contractor

79% said they would use the same contractor again

62%feel their construction risk is managed effectively