And for others, inflation is joined by the pariah of the family, stagflation.
Stagflation is rising inflation coupled with slow economic growth and unemployment. It offers a bleak picture.
According to the UN, the global economy could be about to hit crisis mode – the aftermath of a global pandemic, and the war in Ukraine.
The world economy is suffering and there’s a downgrade in growth prospects. The World Bank predicts that global growth will drop nearly 6% from last year to just under 3%.
For many countries, inflation is the highest it’s been in decades.
You know the inflation drill – rising food and energy costs have a knock-on effect.
And in the construction industry, this spells a myriad of issues:
- Rising material costs
- Rising labour costs
- Competing against unrealistic bids for tenders
- Uncertainties regarding future costs
How do you help to mitigate these issues?
- Do thorough project budgets around the most accurate pricing you have available
- Factor inflation into your bidding process
- Discuss risks with Tier 1’s and stakeholders
- Factor in supply chain uncertainties
- Negotiate completion timelines
- Weigh up stockpiling
- Be on top of insurance policies to minimize risk
- SECURE BETTER CONTRACTS
Luckily we’re here to help with all your contractual needs so that you can navigate inflation and stagflation.