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Procurement Insights
RUSSIA/UKRAINE CONFLICT - IMPACT ON LAING O'ROURKE
Summary
• The main impacts of the Conflict are likely to be indirect e.g. higher prices for energy (oil and gas) and
raw materials (e.g. copper and aluminium), sourcing constraints driving additional demand in nonRussian/Ukraine
markets.
• The most exposed subsector of the Construction industry are the professional services, although this is
largely exposure to individual projects, and few firms have operations in Russia.
• The direct impacts of the Conflict are rapid price inflation for steel and diesel, and the supply of goods
affected by issues with shipping and logistics (e.g. Russian ships not being allowed to dock at UK ports
regardless of source of goods).
• The Conflict comes at a time when a combination of other Supply Chain pressures (multiple Black
Swan events) are also affecting inflation, lead times & shortages (e.g. lockdowns continue in China
affecting supply of electronic products, ongoing global shipping challenges (added to by P&O's
recent news)). Procurement Leaders expect market volatility to continue for some time (perhaps a
couple of years).
• There are concerns that some public/private sector clients are now considering cancelling or delaying
large projects due to the increase in raw material, energy, and diesel costs, and the unpredictability of
future price increases.
Market Trends
Currency
• Last Week: 1 GBP = 1.1777 Euros
• This week: 1 GBP = 1.1737 Euros