An analysis of macro-level factors impacting the volume of formal disputes in the UK construction industry

This paper examines macro level factors affecting number of adjudications in the UK construction industry. The literature focused only on the micro project level causes of disputes rather than macro factors affecting willingness to compromise. This paper proposes that level of competition affects willingness to compromise, which further impacts the choices of dispute options. A rigorous general-to-specific process was adopted to identify the optimal ARDL Model. Cointegration was concluded in the final model which was used to evaluate 7 refutable hypotheses based on data from Q3 1999 to Q1 2024. The final model was found to be stable with high speed of adjustment. Significant factors impacting number of adjudications include percentage of refurbishment and maintenance work and unemployment rate in the long run, and construction output in the short run, while marginally significant factors include construction output and number of people in industry in the long run and unemployment rate in the short run. Domino effects are also evidenced. It is concluded that macro level factors will impact number of formal disputes, possibly through changes in willingness to compromise. Possible explanations for the structural break from Q4 2013 to Q1 2017 are also provided.