Preparing Multiple Scenarios is Key for FY26
Ongoing disruptions in the Australian market—ranging from labour shortages to material delays—are compounded by global uncertainty, including unclear U.S. tariff policies that could impact the cost and availability of imported goods. In this environment, suppliers to the construction industry must plan not just for growth, but for resilience. For accountants, legal advisors, and consultants, this is a critical moment to help clients navigate complexity, manage risk, and position themselves for sustainable success.
Key Components of a Resilient Growth Strategy
- Scenario-Based Planning: Encourage clients to move beyond static forecasts. Scenario planning—factoring in best-case, base-case, and worst-case outcomes—can help suppliers prepare for shifts in demand, pricing, and policy. Establishing pre-determined rules driven by ‘What-if’ scenarios accelerate agility and minimises the impact of sudden changes in landscape.
- Operational Flexibility: Suppliers need to build agility into their operations. This includes diversifying suppliers, investing in modular production capabilities, and reviewing contract terms to allow for pricing volatility and delivery delays.
- Strategic Stakeholder Engagement: In uncertain markets, relationships matter more than ever. Suppliers should deepen engagement with architects, specifiers, and contractors to ensure they are part of early project conversations and can influence material choices.
- Financial and Legal Readiness: Growth in a volatile market requires careful financial planning. Advisors can support clients with cash flow modelling, funding strategies, and legal reviews to ensure contracts are robust and adaptable.
- Concentration of Risk: Suppliers must diversify their revenue streams and monitor their customer mix closely. Relying too heavily on a few major clients can leave businesses vulnerable. Setting clear KPIs around single client’s share of overall revenue is a powerful step toward building resilience.
Top Three Tips to Share with Clients
- Plan for Multiple Futures: Help clients develop flexible business plans that account for different market scenarios, including changes in tariffs, interest rates, and material availability.
- Build Strategic Relationships: Encourage proactive engagement with specifiers and architects to increase the likelihood of being included in project designs, even as project scopes shift.
- Review Contracts and Risk Exposure: Work with clients to assess their exposure to price fluctuations, delivery delays, and regulatory changes. Ensure contracts include appropriate clauses for force majeure and price escalation.
Key Questions to Get the Conversation Started
- How many scenarios have you planned for in your plans and forecasts?
- Are you clear that your plans will outperform your competition?
- Are your current contracts flexible enough to protect you in the event of project delays or cost overruns?
- What happens if your major customer collapses or goes elsewhere?
- What is your biggest customer in terms of % of revenue?
Active Directions is delivering a Construction Industry Research Program to provide market intelligence that suppliers into the construction industry need. The detailed category analysis, spend analysis, customer and competitor insights are aimed at helping suppliers differentiate from the current competition.
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