Construction Delays: How To Mitigate Their Impact On Your Business

Construction Delays: How To Mitigate Their Impact On Your Business 

We tend to find that most of our meetings lately start with a barrage of questions:

• "How is the market doing?"
• "How are our other construction clients finding things?"
• "Are we the only ones finding it so difficult to trade?" - the answer to this question is always, "no you are not!"

A major concern at the moment in the industry is the delay in construction this year. So, what has caused these delays and what should you as construction business owners know?

Building material shortages and supply chain issues, which were so prevalent in 2021 have continued well into 2022, resulting in delays in projects, pushing back completion dates and increasing construction costs.

According to Buildertrend, the average days delayed across the whole job increased from pre-pandemic levels of 12.61 days in 2018 to 21.55 days in 2021 and now 46.88 days in 2022.

The IHS Markit/Chartered Institute of Purchasing and Supply Purchasing Managers surveyed 170 construction companies and the results are very interesting. In addition to material shortages and supply chain issues, they also identify poor planning and unrealistic scheduling as the most common factor that causes project delays. This is a common occurrence in the industry, especially in contractor-led procurement projects.

Another factor is the lack or delay in information about the project. Not having the full information about a project is usually a shortcoming on the client’s side, who need to provide the drawings, design documents, site information and timeline approvals.

Finally, changes to the initial specifications are now more prevalent. Adjustments may be made to the original design or material choice, depending on the client’s needs or the contractor’s recommendations. This often affects the already tight schedule and may have financial implications too, which cannot be immediately met, leading to the stalling of the project.

Another factor is obviously the shortage of labour and ever-increasing labour costs.

So how best do you address these issues? I suggest that you:

1. Ensure a detailed planning process is followed for every project which includes:
   1. Obtaining all the required information, ensuring that you have detailed drawings and completing a site visit before starting the work.
   2. Improve scheduling and project management, with realistic targets.
   3. Agree on the terms with regard to project delays and agree on who is responsible for the financial outlay.
2. Improve on the job monitoring and agree regular updates with all parties involved.
3. Agree your purchasing process and timeline. To best mitigate shortages or price rises, you should:
   1. Order in advance.
   2. Where possible, fix prices with your suppliers in line with any fixed customer prices, or agree to pass on any material increases to your customer.
   3. Source the market to see if cheaper suppliers want to do business with you.

Costs are up and projects are taking longer to complete. Your planning process, contract terms and job monitoring are vital to ensure that you can mitigate the financial impact of these delays as much as possible.

If you have any further questions please don't hesitate to email me at andrew.coney@raffingers.co.uk or click here to get in touch with us.