Improving investors’ confidence key to wellbeing of industry next year, Gleeds survey says

Investor confidence is the top-ranked threat to the construction industry, Gleeds has said in its latest quarterly survey.

The firm’s Q4 report warned that concerns about public finances are influencing the economic outlook and whether jobs get out of the ground.

It found that only 21% of survey respondents believe the Autumn Budget will encourage greater investment in the UK property market, with nearly 40% expecting a decline.

Additionally, insolvencies and supply chain capacity remain critical issues. Nearly six in 10 expect further Tier One contractor failures within the next 12 months.

But a third of respondents said ISG’s failure could drive positive industry change, such as improved margins and wider adoption of project bank accounts. Four in 10 reported increased exploration of alternative procurement strategies, including target cost and incentivisation models.

Cash flow (53%) and pipeline stability (20%) were identified as the primary concerns for contractors.

Gleeds chairman Richard Steer added: “Potential trade tariffs from the US and instability elsewhere has had a significant impact on investor confidence, which ranked as the number one threat to the industry.”

Labour and skills shortages also remain a worry, Gleeds said, with expectations that these will continue to mount.

And just 12% of respondents expressed confidence that pledges such as building 1.5 million homes and infrastructure projects will be delivered in the planned timescales.

Meanwhile, improving economic conditions and gradually falling interest rates have buoyed sentiment. In our latest survey, just 16% of respondents anticipated fewer tender opportunities in 2025 than in 2024, while 38% forecast an increase.