RLB recently carried-out a global survey in which our Directors and Partners provided their views of the effects of the current geopolitical crises. This report looks at the overall global findings and responses, with additional local analyses available in some regions.
The reader’s attention is drawn to the fact that the global analysis can, and does in some places, produce conflicting results in the context of comparison with Regional views. This is inevitable, as the impacts experienced around the globe are variable depending on commercial and political relationships and geography.
There can be no doubt that the construction industry has moved from trying to create certainty in the long term, to navigating uncertainty in the short term and within the larger economic climate. The global construction market is experiencing volatility of commodities and labour pricing caused by a combination of:
- Ukraine/Russia conflict
- Post-Covid recovery
- New Covid waves
- Rising cost of energy and fuel
We know there are project challenges around volatility of prices, lead in times of materials and shortages of labour – and at times project feasibility is being questioned. However, projects need to continue as the demand and need for buildings continues, be it affordable accommodation, a new school or new office space.
At RLB, we listen to the wide range of voices in the supply chain, from suppliers, sub-contractors and contractors talking about price increases, profit margin squeezes and challenges within the labour market, as well as clients needing certainty in outcomes and reducing risk on projects.
To ensure we remain close to our supply chain and bring the best counsel to our clients, we undertook the global survey to find out the exact impact of geo-political issues such as the war in Ukraine, the ensuing energy price volatility, and other global challenges. It is no surprise our first responses have come back with comments such as: “procurement strategies are being reviewed and project viabilities are possibly at risk”, “we are now facing a new world order as a new normal” and “contractors are requesting contractual mechanisms to allow for price adjustment such is the price-volatility of materials.”
Key findings are summarised throughout this Global report, download at the top of the page.