The consultancy firm’s latest survey also reveals that a majority of contractors predict there will be a Labour victory at the next general election

Interest rates and inflation remain the biggest threats to growth, according to the latest construction market survey by Gleeds.

The consultant said nearly eight in 10 respondents had said the combination of cost escalation and viability pressures would hit jobs.

“In previous reports, we have alluded to uncertainty being the new normal, which looks to be the case as we end 2023,” Graham Harle, chief executive said.

Graham Harle, CEO, Gleeds

Gleeds boss Graham Harle has warned about the impact on energy prices from the current unrest in the Middle East

A majority (80%) of survey respondents expect the general election to occur in a year’s time and more than half (64%) predict a Labour victory.

Harle predicts that wider “global headwinds” from energy pricing to the impact of the Israel-Hamas conflict on the “already volatile” energy markets, the disruption of crude oil and a surge in natural gas prices could all hit production costs.

However, the survey reveals that, despite still being elevated post-pandemic, the price of materials looks steady, with 80% of respondents saying that market prices continued to settle in the third quarter of this year.

The survey also suggests that despite the slowing down of the market and evidenced challenges, less than a quarter (23%) of respondents think 2024 tender opportunities will be less than in 2023.

A majority (82%) of contractors said they or their supply chain declined a tender in the past quarter, down from 95% over the summer.

Harle added: “Construction insolvencies remain at an elevated level and the recent spate of high-profile firms going under shows the magnitude of the issue. Insolvencies can heavily disrupt and influence local markets for a long period after the event, not least affecting other suppliers and subcontractors the companies worked with.”