Weathering the Storm: Supplier Relations in Construction Sector

The importance of monitoring credit ratings, unpaid taxes, and more

The Swedish home construction market has faced a challenging year in 2023. The sector has been hit hard by high interest rates and decreased investor confidence, leading to a significant slowdown in the market. The full recovery of the sector is not expected before 2026, marking a period of uncertainty and volatility for businesses operating in this field.

In these turbulent times, it is crucial for businesses to manage their relationships with suppliers effectively, and in this article, we’ve listed 4 crucial topics to consider in the process of doing so. By addressing these topics, businesses can improve how they navigate these volatile times and position themselves for success when the market recovers.

1. Credit Ratings: A Key Indicator of Financial Health
Keeping track of a supplier's credit rating is a crucial part of managing supplier relationships. Credit ratings are an indicator of a company's financial health and its ability to meet financial commitments. A poor credit rating could signal financial instability, potentially leading to disruptions in supply. By monitoring a supplier's credit rating, businesses can anticipate and mitigate potential risks, ensuring a steady supply of materials and services.

2. Unpaid Taxes: A Potential Red Flag
Unpaid taxes are another key aspect to monitor. They could be a sign of financial distress or poor financial management, both of which could impact a supplier's ability to deliver. By keeping track of a supplier's tax status, businesses can identify potential issues early and take appropriate action, whether that's finding an alternative supplier or working with the existing supplier to address the issue.

3. Certifications: Ensuring Compliance and Quality
Certifications are a testament to a supplier's commitment to quality and compliance. They demonstrate that a supplier meets certain industry standards and regulatory requirements, which is particularly important in the home construction market where safety and quality are paramount. By tracking certifications stay within validity, businesses can ensure they are working with reputable suppliers who can deliver high-quality products and services that continue to invest in their processes. 

4. Purchasing Summary: History log
Keeping a thorough record of all purchases towards suppliers, allows businesses to track their spending and make more informed financial decisions. It can also help in identifying areas where costs can be cut without compromising on the quality of goods and services.

Moreover, by keeping a detailed record of all purchases, businesses can gain a clear understanding of where the money is going. This can help identify areas of excessive spending and potential cost-saving opportunities, as well as give an indication if your business is spending too much on a single supplier (in relation to the financial health of the supplier). This is particularly important in a challenging market like the one currently facing Sweden, where cost efficiency can make a significant difference to a company's bottom line. 


The current challenges faced by the Swedish home construction market underscore the importance of effective supplier relationship management. By keeping track of credit ratings, unpaid taxes, and certifications, businesses can manage potential risks better and ensure a steady supply of high-quality materials and services. However, a strong supplier relationship is not just about managing risks; it's also about building partnerships that can drive innovation, improve efficiency, and create value. By investing in these relationships, businesses can not only weather the current storm but also emerge stronger and more resilient and recover faster than the competition.