What to expect in construction in 2023

Recent years have brought a host of challenges for the construction industry but what we expect for 2023?

Building Safety

Building safety will continue to be the most significant issue affecting the construction sector, with several developments expected for 2023.

• The remainder of the provisions of the Building Safety Act 2022 (BSA) are expected to come into force.  This will include secondary legislation covering the definition of higher risk buildings, the new gateway regime, new duty holder obligations and the golden thread of information and construction projects.
• Phase two of the Grenfell Tower inquiry closed in November 2022 and its report is expected in late 2023.  However, no fixed timeline has been set and the 300,000 documents disclosed to the inquiry will need to be considered.
• The extended limitation periods of up to 30 years introduced by the BSA may permit previously abandoned claims to be resurrected.  It remains to be seen how these will address the practical difficulties of pursuing a claim long after the events in question, including the unavailability of witnesses and documents being routinely destroyed in the intervening period.
• More cladding related claims are expected in the courts, following last year’s judgment in Martlet Homes Ltd v Mulalley & Co Ltd, which saw the first successful claim to recover the cost of replacing dangerous cladding. 

Economy and insolvencies

We enter the year facing challenging economic headwinds.  Inflation continues to run at levels not experienced for 40 years and is coupled with labour and material shortages and increasing interest rates.  Construction accounted of 18% of all UK insolvencies in 2022 and the trend looks set to continue in 2023.

Climate change

The UK has imposed ambitious environmental targets to be met by 2030.  These should feed through into the construction sector – the UK construction industry is currently responsible for 50 million tonnes of embodied carbon each year…  A private members’ bill – the Carbon Emissions (Buildings) Bill – would have required whole-life carbon emissions of buildings to be reported and set limits on the embodied carbon in the construction of buildings.  However, the Bill has not attracted government support and is unlikely to become law, so this challenge will have to be addressed elsewhere.

Modern Methods of Construction

Modern Methods of Construction (MMC), such as off-site manufacturing, should have an increasing role in 2023.  Government policy is to support MMC, as seen in the Construction Playbook published in September 2022.  The increased use of MMC could be part of the solution to meet climate change targets.

JCT Contracts

It is 7 years since the 2016 update to the JCT suite of contracts and new editions had been expected for 2023.  However, in light of all the changes in law and technology that they will need to encompass, any updates are likely towards the end of the year or even 2024.

If you have any questions in relation to challenges you are facing in the construction industry please contact our construction lawyers for advice.