UK construction can be a lucrative industry to work in, especially in Birmingham where the number of new schemes under construction increased by one-third during 2021-2022.
Yet construction projects also carry high levels of risk. Understanding the challenges and taking steps to protect against them is the key to success. So, what should you watch out for?
Below, we’ll explore five common construction project risks.
- Project delays
Prolonged timelines are an ever-present risk for construction projects, stemming from sources such as mismanagement, accidents, and even bad weather. Project delays usually lead to unhappy clients and lower profits. Potential delays need to be communicated as soon as they’re recognised. The earlier they’re addressed, the greater the chances are to prevent them.
- Health and safety hazards
The construction industry is renowned for being highly dangerous. In fact, it was the industry with the highest no. of fatal injuries in 2022.
Injuries on the job site can lead to lengthy delays while investigations are made, which is why it’s important that you have builder’s insurance that protects against injuries to employees and carry out thorough risk assessments before and throughout projects.
- Supply chain shortages
The construction supply chain is often disrupted by global events such as the COVID pandemic. Whenever there’s an inadequate supply of building materials, construction projects are held up as they wait for the disruption to end. This can result in project delays of a more frustrating sort, as the source of the problem is out of your control and you don’t know when the project will be able to get back underway.
- Material prices
The prices of raw materials needed for the project are a big risk, eating into profit margins. This is another risk that’s largely outside of your control, often due to influences on a wider scale. For example, construction material costs recently went up by three-fifths due to Brexit.
- Labour shortages
Finding properly qualified and reliable employees for your construction projects can be a frustrating challenge, meaning that there’s often a serious risk that manpower might fall through. When this happens, it slows the project down and, if you’re missing specialist workers, can even bring it to a halt. Like most risks, this can end up pushing back the project deadlines, exposing you to displeased clients and revenue losses.
The bottom line
Construction projects are subject to many different risks, ranging from manageable risks like safety hazards to wider issues that are largely outside of your control. By understanding the most common sources of risk, you can minimise their effects, improving your chances of avoiding delays and lost profits.
