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When the industry finally does recover from the downturn, there is a risk that lead times will soar, and design and procurement programmes will have to absorb anything up to an additional six months across the main trades.

How long you believe it will be before the industry climbs out of the recession depends on whether you are an optimist or a pessimist, and what stage of the construction process you are involved with. But whatever your forecast, our research indicates that failing to make provision in your programmes could have disastrous effects.

Current lead times remain at an all-time low and the feedback confirms that, with a couple of exceptions, trades are reporting no change. While some trades are starting to notice increased enquiry levels, and some are even reporting increased workload, there seems to be an overriding air of caution in the market. Reviewing the data that we have collected on lead times over the past 10 years, I can see that there is a trend for them to increase rapidly after a recession, and that there is no reason to believe this will not happen at the end of this downturn.

In the current climate, price is undoubtedly the overriding factor in the selection process of contractors. However, programme is increasingly important for clients as they seek to generate a return on capital investment at the earliest opportunity. As a result, lead times are a factor that may influence team selection for a project. Given this situation, it is not unreasonable to assume that in their attempts to secure more work, contractors will try to absorb increases and report improved lead times. Absorbing the lead time can be achieved by working longer hours and reallocating resources, although this can only be a short-term solution.

Although an upturn in the industry would be welcomed by most, it is likely to be followed by a higher level of business failure as companies struggle to cope with increased workload, depleted resources and reduced financial capacity. From a lead times perspective, resources will quickly become stretched and the 鈥渟uppressed鈥� lead time reporting will surface in the form of a sudden leap.

Planners that have based their programmes on the lowest, or even 鈥渟uppressed鈥� lead time figures, without sufficient float, may be caught out as contractors become overstretched. This is a particular risk to design and procurement programmes, and it could lead to contractors trying to gain time extensions or failing to deliver to programmes, or failing as businesses. The variance between the shortest reported lead time for a particular trade and the longest in the past has been more than 300% and with the compound effect of the increases there is significant potential for the entire programme to push out.

The last big downturn for which there is lead time data was the dotcom boom and bust that ended in 2002. Looking back on the effects on lead times between this recession and the boom in 2008 provides an insight into the likely impact when the current recession comes to an end.

Focusing our research on the items on the critical path for a typical shell-and-core building, we have found that piling lead times grew rapidly from four to six weeks
in one year between 2003 and 2004. Structural steel frame recovered more steadily over five years between 2003 and 2008 but the impact was significant, with an overall increase in lead times from four to 19 weeks, which is an average of three additional weeks a year. As one of the later trades, cladding in natural materials did not begin recovery until 2004 but then increased from 23 weeks to 30 in 2006 and on to 45 in 2007; the lead time for curtain walling systems, which has not yet reached its previous low, more than doubled from 20 to 50 weeks between 2006 and 2007. Concrete lead times were still dropping until 2004 but then doubled from five to 10 weeks in the year until 2005. Finally, asphalt roofing lead times grew from six to 10 weeks between 2003 and 2004.

Considering the above examples and applying it to a hypothetical construction programme drawn up prior to 2003 on a two-year project, and with all of the above items stacking up on the critical path for the design and procurement programmes, such a programme may have to absorb anything between six months to a year of increased lead times. Although this will obviously not result in a comparative extension to the construction programme, it is essential that provision be made in design and procurement programmes for orders to be placed with specialist contractors in sufficient time to avoid large increases.

Another factor to consider is the ability for factory production to respond to an upturn; although on-site construction can be relatively flexible thanks to the introduction of more labour and resources to accelerate the programme, factories that have had to close production lines or reduce shifts will be unable to respond as quickly to changes in demand, particularly given that stocks will have been reduced during the recession.

This should demonstrate the importance of always linking the critical paths in a design and procurement programme to those in the construction programme, but particularly at a time of economic change.

Brian Moone is operations director of the Mace Business School