Mark Robinson, group chief executive at SCAPE, one of the UK’s leading public sector procurement authorities, said:

“Despite the sustained recovery of order books in the first half of the year, June’s fall in output is a sign that the long-term challenges facing the construction industry are starting to bite, with material and labour shortages inflating costs and extending project timelines. Inflation is tipped to continue rising until the end of the year at least, which has the potential to hamper the impact of increased government spending, as it looks to modernise infrastructure and stimulate a construction supercycle.

“The support provided to SMEs in the coming months will be key to mitigating any negative long-term effects – particularly for those businesses with restricted buying power or weaker order books post-Covid. Larger contractors can play a key role by ensuring SMEs are able to plan effectively whilst supporting their cashflow through fair payment practices.”