Flat is the new tomorrow in the UK construction market. With the latest industry figures predicting no growth until 2014 and margins taking the strain, how can contractors adapt to succeed in the challenging UK construction market?
- Optimising cash and working capital management - leading performers are critically analysing their cash flow on a weekly basis, and making strategic improvements in Days Payable Outstanding in the supply chain, improving Days Sales Outstanding and managing retentions.
- Supply chain resilience - through rigorous assessments of sub-contractors’ risk profiles, implementing procedures that provide early warnings of failure and undertaking pre-emptive remedial action.
- Lean for today, fit for tomorrow - many contractors have inevitably looked to the supply chain and restructuring their operating models to achieve efficiencies. However, cost reduction strategies should also revisit what clients will require in the future, to be positioned to capitalise on growth, when it comes.
- Unlocking more value from data - making the most of data is at the heart of finding new ways of doing more for less, and providing invaluable foresight to navigate market turbulence. Download our paper exploring how data analytics can be applied to unlock greater value and predictive insights in a number of key areas, including reducing the risk of loss-making projects, combating fraud, and improving cost control, logistics and even Health and Safety on site.
Opportunities are there for the bold
- M&A is a key route to growth in the shrinking UK market; however, it is vital that any acquisition fits within an organisation’s longer term strategy. Buyers and vendors often need to work together to achieve a successful transaction in this market, and cheap is not necessarily cheerful. Comprehensive due diligence, particularly on contract book, pipeline and supply chain, and synergy reviews are essential to fully understand the risks associated with stressed targets.
- New markets - contractors are increasingly diversifying and looking overseas to bolster UK revenues. Challenges include managing the risks associated with working outside of core areas of expertise, avoiding the pressure to ‘buy’ long-term work at unsustainable margins, and operating in new locations that the existing supply chain is unwilling to service.
Research and insights
Attack the Flat - Article #1: Foresight to navigate the turbulent construction market. The first in a new Deloitte series exploring the key strategies for contractors in adapting to the challenging UK construction market.
GCC Powers of Construction 2012
The Global PPP Market 2012
DJD UK Cities Crane Survey 2012
The right mix for the challenging construction market
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