As every business knows, uncertainty is the enemy.
Ideally, contractors can see their way to a successful year ahead and plan for growth. They can play to their strengths and, where there are known challenges, these can be tackled or offset.
But uncertainty is like a disease. It means not only is it difficult to plan how you should behave, but it is impossible to predict what others will do too.
There are lots of opportunities for contractors in 2016, not least the government’s continued backing for the development of infrastructure and housing. But there are uncertainties too.
Political uncertainty remains
In the political realm, there will be a new mayor of London in May and possibly a vote on whether the UK should remain in the European Union at some point this year.
While there is investment planned in roads and rail, there remains uncertainty over exactly what work will take place when. In the commercial world, investors continue to see the UK as an attractive destination for their money, but the rate of construction cost inflation raises questions over whether developers will wait for the market to cool.
”We can be certain that a divided industry will be weaker than one that combines its strengths”
There is already evidence that projects are being put on hold, while there are warnings that supply chain failures are also on the rise.
The skills crisis continues unabated, with no obvious near-term solution. Further ahead, part of the answer lies in greater offsite manufacture and automation, but until there is a critical mass, contractors that do invest heavily may just carry the costs.
The long game
The way this uncertainty plays out will be significant. Contractors need to play a longer game for their own benefit and for the good of the whole industry. Repeat business, trust and long-term relationships are paramount.
Forecasts suggest the UK will see more output and stronger growth than most of our European counterparts.
And while the weakening Chinese markets are hitting the Australian economy, over here there is not the same cause for concern. A good time, then, for Laing O’Rourke group chairman and CEO Ray O’Rourke to put the Australian part of the business up for sale.
As ever, the industry would do well to strengthen its collective voice. If there’s one thing we can be certain of, it’s that a divided industry will be weaker than one that combines its strengths.