Marie-Claude Hemming, Director of Policy, Association for Consultancy and Engineering
If the last few years have taught us anything, it is that the construction sector is no stranger to volatility. From the COVID 19 pandemic through to the disruption caused by the war in Ukraine, global events have translated quickly into very real pressures on projects, supply chains, pricing and delivery.
During both periods, the Construction Leadership Council issued a range of practical guidance to support the industry in responding to uncertainty. That work remains highly relevant today. It consistently emphasised the importance of early engagement across the supply chain, clear communication of risk, transparency in commercial discussions and a collaborative approach to managing disruption when it arises.
As we look at more recent geopolitical developments, including the conflict involving Iran, uncertainty continues to be a feature of global markets. While (at time of writing) a ceasefire is now in place and has helped reduce immediate escalation risks, energy markets remain sensitive to geopolitical developments and continue to experience volatility. In some areas, this has contributed to upward pressure on costs, particularly where fuel and energy inputs are a significant driver of pricing.
Even where conditions begin to stabilise, experience shows that it takes time for markets to normalise fully. Price movements tend to be uneven, and the effects of earlier shocks can continue to feed through supply chains for some time after the initial event.
The priority now is not the creation of new guidance, but the effective use of what already exists. The CLC guidance developed during COVID 19 and the Ukraine crisis provides a clear framework for managing uncertainty in practice. It highlights practical steps that remain highly relevant, including maintaining open and early dialogue across the supply chain, identifying and discussing cost pressures early, ensuring contractual mechanisms are clearly understood and applied fairly, and focusing on collaborative approaches where risks emerge.
We also know from experience that the impact of sustained cost pressure is not always immediate. Following the period of significant inflationary pressure in 2023, the sector saw increased financial strain across parts of the supply chain, including a rise in insolvencies. This underlines the importance of remaining alert to emerging risks and ensuring that commercial relationships are robust enough to manage volatility without allowing pressure to accumulate unchecked.
In fixed price environments, particularly where contracts extend over long delivery periods, these lessons are especially important. Early communication and shared understanding of risk are critical to avoiding downstream disruption and protecting project delivery.
Ultimately, resilience is strengthened when the industry consistently applies the principles already set out in existing guidance. The tools are in place. The focus now is on ensuring they are used effectively, consistently and at the right time to support stability and confidence across the sector.
Guidance resources include:
