Supply Chains Still in Crisis: How Contractors Can Plan Around 2025’s Volatility

Material costs may no longer be climbing at the breakneck pace seen during the pandemic, but supply chains remain fragile in 2025. Contractors across the UK and US are still facing delayed shipments, rising tariffs, and geopolitical shocks that ripple through project timelines. Margins are under pressure, and confidence is fragile. In this article Jamie Trevett explores why volatility is far from over, how it is reshaping contractor strategies, and why aligning supply planning with workforce management is the best way to keep projects moving.

The Context: Relief, But Not Recovery

United Kingdom

Construction activity in the UK has fallen for five straight months, the longest run since 2020. September data from S&P Global’s PMI showed a sharp drop in housebuilding and weaker commercial output, with supply chain concerns compounding the slowdown (Reuters). Input price inflation has eased, but volatility persists. Contractors are still contending with late shipments, rising insurance premiums, and uncertainty over material availability.

United States

The US picture is just as complex. Tariffs remain a live threat to project budgets, particularly on steel, aluminium, and manufactured goods. Developers report millions in additional costs when duties bite, one New York residential project saw a $2 million overrun from steel alone (Business Insider). Equipment manufacturers such as Caterpillar have lifted their 2025 tariff cost estimate to as much as $1.8 billion, showing the scale of exposure to imported components (Reuters).



Relief from pandemic-era inflation has not meant a return to stability. Instead, volatility has become structural.

Why Volatility Still Rears Its Head

Several drivers keep supply chains unpredictable:

• Geopolitical pressures: Global trade tensions continue to affect construction supply chains, with tariffs and countermeasures hitting steel, aluminium, copper, and key manufactured products.
• Geography of sourcing: Heavy reliance on Asian and European suppliers means long lead times are still vulnerable to port congestion, weather events, and political shifts.
• Shift to modular: Some contractors are leaning on modular and prefabrication to reduce risk. US LNG builders, for instance, are adopting modular assembly to limit exposure to rising costs and delivery delays.
• Tariff uncertainty: Policy reversals and new trade actions keep markets guessing. The construction sector is especially exposed, as projects run on fixed bids while tariffs fluctuate.



The result is a stop-start environment that challenges even 

The Impact: Margins Squeezed, Timelines Stretched

Margin pressure: Contractors bidding tight to win work are caught out when tariffs or delivery delays push costs up. Baldwin CPAs warns that without escalation clauses, contractors risk absorbing cost increases they cannot recover.

Schedule slippage: When shipments arrive late, sequencing falls apart. Labour sits idle, or crews have to be re-deployed at cost. Even minor material delays ripple through mechanical, electrical, and finishing stages.

Confidence hit: In the UK, weaker new orders signal investor caution, with clients wary of locking into contracts if they doubt supply certainty (The Guardian). In the US, developers are delaying or redesigning projects to hedge against tariff exposure.

Strategic Responses: How Smart Contractors Are Adapting

There is no single fix, but leading contractors are adopting layered strategies to absorb disruption.

a) Diversify sourcing and localise where possible

Some UK manufacturers are onshoring production of construction materials to cut reliance on imports. Contractors who work with domestic suppliers reduce exposure to long supply lines and geopolitical shocks (JLL). Academic research also points to resilience gains from regional supply networks rather than global single points of failure (arXiv).

b) Write smarter contracts

Escalation clauses and allowances for tariffs are now standard best practice. Legal and financial advisers recommend explicit frameworks for sharing risk between clients and contractors (Baldwin CPAs). Without them, contractors are gambling.

c) Shift to modular and prefabrication

Prefabricated components built in controlled environments allow firms to secure materials earlier and reduce on-site labour requirements. LNG builders are proving how modular can compress schedules and mitigate exposure to volatile shipping routes (Reuters).

d) Use supply chain finance and hedging

Supply chain finance hubs are being leveraged to spread risk and maintain liquidity when tariffs bite or deliveries stall (Times of India). Hedging against commodity price swings is increasingly part of construction risk management.



e) Integrate procurement with workforce planning

Procurement cannot sit in a silo. Sequencing work to the labour you actually have, not the labour you expect, is key. If shipments are late, flexible deployment and staggered workforce scheduling can reduce downtime.

Workforce Planning as Operational Insurance

A resilient supply chain is only half the story. Workforce flexibility is the other. Contractors who maintain adaptable labour pipelines are better positioned to absorb shocks.

• Cross-training: Multi-skilled workers can shift between tasks when a specific material is delayed.
• Staggered deployment: Bringing in crews in phases avoids idle labour when shipments slip.
• Retention bonuses: Short-term incentives keep skilled labour on standby rather than losing them when schedules wobble.



When material volatility is unavoidable, workforce agility becomes the buffer that protects delivery.

Where Just Recruit+ Fits

Just Recruit+ helps clients plan workforce strategy around supply volatility. That means sourcing multi-skilled candidates, building flexible regional pipelines, and matching project sequencing to realistic labour availability. The aim is not just to fill roles but to provide resilience, ensuring that when procurement shifts, the workforce can pivot with it.

Final Take

Supply chains are still in crisis. Costs may have eased, but volatility remains baked into global trade and logistics. Tariffs, politics, and weather events will keep construction exposed for years to come. The contractors who succeed are those who stop wishing for stability and start planning for disruption.

That means diversifying suppliers, writing smarter contracts, adopting modular, and using finance tools, all aligned with a workforce plan that can flex as schedules shift. With these layers in place, volatility becomes a challenge that can be managed rather than a crisis that derails projects.



For firms that get it right, margins stabilise, delivery confidence returns, and clients keep awarding work. For those who do not, 2025 will be another year of excuses and lost bids. The choice is clear.