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Following two major recessions the Construction industry is still somewhat hollowed out from the financial crisis. However as confidence shows signs of returning on the back of strengthening economic data and the demand for new homes, the concern now for a lot of Contractors is the supply chain, in terms of both resources, skills and materials as most have stripped capacity significantly over the course of the downturn to meet the lower levels of demand.

Speaking on ITV News, Vince Cable said the UK is falling “way short” on the housing supply needed.“There is an enormous gap between what’s needed, which is probably 300,000 houses a year as my party is advocating, and what we’re currently getting, which is 125-130,000,” he said.

No matter how upbeat the economic forecasts and the latest demand figures, supply chains in construction are unlikely to replenish the capacity immediately. The number of SME’s working within construction, also considered to be the backbone of the industry, has halved over the last 10 years.

A focus on developing closer relationships could help them overcome this shortfall, by ditching the traditional buyer/supplier mentality and becoming more in favour of forming flexible strategic partnerships.

To achieve this, the focus will no longer be the push for a lower price; instead smarter businesses are engaging a smaller number of strategic suppliers to support their growth plans and treating them as if they are part of the business.

As growth returns, business success will look very different from how it did during the downturn.

Instead of cost being the dictator, strategic supply chain partnerships based on strong business relationships will be distinguishing mark of any successful, fast-growing construction business.

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