£175,951: Average value of contracts, compared to £130,968 in 2018
At a time when Brexit and its impact on the economy is dominating headlines, the report reveals that subcontractors are not immune from the uncertainty and disruption being caused. Brexit is seen as the biggest threat to subcontractors in 2019, with larger firms the most concerned. And 89% of surveyed subcontractors are calling on the Government to act to restore confidence.
Linked with fears around labour shortages and rising costs, it’s unsurprising that Brexit is the primary threat to the sector, with a quarter of respondents (25%) citing it as their main challenge. Yet subcontractors are also facing commercial pressure from decreasing work volumes (13%).
Key Findings in 2019
A quarter (25%) of subcontractors see Brexit as the biggest threat to their business with larger businesses the most likely to cite this as their biggest threat. This is likely driven by the exposure that bigger businesses have from negative economic headwinds linked to Brexit, such as those that rely on trade or employ labour sourced from overseas.
The weaker pound is another factor adversely affecting businesses across the board. It has increased the cost of importing raw materials, and so it is no surprise to see that more than one in ten (12%) subcontractors, with a turnover of £5m plus, are the most affected by this as they tend to purchase more materials.
The research revealed other threats, including fears linked to a lack in demand / decrease in work (13%), the UK economy (8%) and skills shortages (8%). Whatever the future holds, ambitious subcontractors should look to use different forms of funding to help them reach new goals and achieve bigger and better things for their business.
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