The recovery might be well underway but material cost inflation and supply concerns are being to mount according to the latest Construction Product Association’s (CPA) State of Trade Survey. The survey announced that the construction products manufacturing sector posted a fourth successive quarterly expansion in the second quarter of 2021.

Private housing, infrastructure and private housing repair, maintenance and improvement (rm&i), in which activity remains firmly above pre-coronavirus levels, continued to be the main drivers of growth.

The supply of raw materials and components over the coming year remains the largest concern for manufacturers due to bottlenecks in the global supply chain. Unsurprisingly, raw material prices followed next as a potential constraint for heavy side firms alongside demand, whereas labour availability concerns rose up the agenda for light side firms. Cost pressures are being driven by rising energy and fuel costs.

In 2021 Q2, nearly two-thirds of heavy side manufacturers and 44% of light side manufactures reported that sales had increased compared to Q1. With demand in private housing and private housing rm&i expected to be sustained by both government stimulus and increased appetite for properties with more outdoor and office/study space, 67% of light side firms expected a rise in product sales in the year ahead.

On the heavy side, this balance (79%) was the highest in nearly eight years, reflecting work occurring on large infrastructure projects. Plans for hiring also remained on the table, with 61% of light side firms anticipating increasing headcount, the highest balance in seven years.

Despite the rollout of vaccines and the easing of pandemic-related restrictions across many countries, albeit to varying degrees, exports data showed a mixed picture in Q2. 8% of heavy side firms reported an annual decline in exports, compared to a zero balance in Q1. On the light side, however, around one third of firms reported an annual increase in exports sales. Looking ahead, two thirds of heavy side manufacturers and half of light side manufacturers anticipated an increase in exports.

Amandeep Bahra, CPA Economist, said: “The recovery of the construction products manufacturing industry is well underway, with manufacturers posting the fourth consecutive quarterly rise in product sales in 2021 Q2. Adding to this positive news were expectations of further growth in the year ahead and plans to hire. However, with global supply chain woes lingering due to a lack of shipping containers and drivers, a record proportion of manufacturers cited the supply of materials and components as a major constraint on the 12-month horizon. Inevitably, this stoked concerns among heavy side firms over high raw material prices over the coming year. As self-isolation and Brexit rules also bite, the industry’s long-standing issue over labour availability was a key risk for light side firms.”

Key survey findings include:

  • A balance of 63% of heavy side firms and 44% of light side firms reported that construction products sales rose in Q2 compared with the previous quarter, the fourth consecutive quarter of growth.
  • On balance, 79% of heavy side firms and 67% on the light side anticipated a rise in sales over the next 12 months.
  • 52% of heavy side firms and 45% of light side firms cited material/component supply as the factor most likely to constrain output over the next 12 months, the highest proportions on record.
  • Demand was cited as a key expected constraint, according to 15% of heavy side firms and 32% of light side firms.
  • On the light side, 16% of firms cited labour availability as their key constraint over the next 12 months, the highest proportion since 2018 Q4.
  • On the heavy side, 15% of firms cited raw material prices as their key constraint over the next 12 months, the highest proportion since 2010 Q4.
  • 61% of light side firms anticipated increasing headcount during the next 12 months, the highest balance in seven years.

Construction output is currently very buoyant and is forecast to rise by 13.7% in 2021 and 6.3% in 2022, according to the Construction Products Association’s (CPA) latest Summer Forecast published. This positive outlook comes despite shortages and sharp cost rises in both imported construction products and skilled labour over the next 12 months.

Infrastructure and private housebuilding are expected to be key drivers of construction growth in 2021 and 2022, while the outlook for the commercial sector remains subdued.

The CPA has revised down its infrastructure forecast for 2021 to 23.4%, it has upwardly raised its forecast for 2022 to 9.7% for 2022 owing to further delays and cost overruns on major projects. The Summer Forecasts also report an increase in client hesitancy to sign off medium-sized projects leading to a slowdown in the near-term pipeline for the sector.

CPA forecasts house building starts to rise by 20.9% in 2021 and a further 9.0% in 2022. The outlook is particularly strong for houses outside major cities, owing to shifts in working patterns, and is likely to remain so for the next 6-9 months at least according to house builders.

Private housing repair, maintenance and improvements (rm&i) has been the quickest construction sector to recover since the initial national lockdown. Output in March 2021 was 19.3% higher than pre-Covid times, according to the Office for National Statistics (ONS), due to the ‘race for space’ – i.e. demand for better quality outdoor domestic leisure space and home office work environments. Most SME contractors are reporting projects lined up for at least the next six months.

In the commercial sector, the beginning of the year saw a rise in activity owing to fit-out work remodelling offices for staff to return in a socially distant manner. This was also the case in retail and leisure where refurbishing, reusing and repurposing helped prepare for reopening as social distancing restrictions eased. In addition, some larger office towers projects that had the contract signed or were started pre-Covid-19 continued in the first half of this year. Outlook for sector remains subdued, however, largely because of fewer big projects in the pipeline – particularly for new towers in London.

Noble Francis, the CPA Economics Director, said: “The key constraint to the CPA construction forecasts remains the cost and availability of imported products and skilled labour. The sharp recovery for both UK construction and also in places such as the US, has led to sharp cost increases and extended lead times for some key products such as paints and varnishes, timber, roofing materials, copper and steel. This is of concern particularly for SMEs, which account for 86% of construction employment.

“Whilst larger contractors and house builders have greater certainty in their pipelines of work and are better able to plan and purchase in advance, SMEs often purchase what they need on the day at builders merchants. This makes them subject to greater issues if supply is limited or costs have risen significantly, particularly for firms working on fixed price contracts.

“On the labour side, some contractors are finding that there is currently a shortage of key skills in some key hotspots of activity, which has been exacerbated by the fall in EU construction labour by 42% over the past four years according to the ONS.”

On a wider economic front, the EY ITEM Club predicts GDP growth of 7.6% this year, the fastest growth since 1941. 6.5% growth is expected in 2022. The expectations of a bounce-back in consumer spending and supportive macroeconomic policy contributes to the largely positive economic outlook. However, questions remain over inflation prospects, predicted to reach 3.5% by Q4 of 2021; how consumers will tap into pandemic savings remains to be seen.

The CPA produces a range of economic reports that provide its members, policy-makers and wider industry with a detailed understanding of the construction market to facilitate planning and business development. Members of the Association are entitled to receive these insights at no additional cost. Non-members can make one off purchases or subscribe for a full information package.


Construction industry leaders have called for acceleration of rules relaxing requirements for COVID- 19 self-isolation for double-vaccinated workers.

On August 16 the regulations on self-isolation will be relaxed across the economy, when anyone who has been double-jabbed will be able to continue to work if they are notified that they have been a contact of someone that has COVID-19.

But ahead of the change, construction businesses from merchants to manufacturers and consultants to contractors are being severely hampered as staff are having to stay home after being identified as a contact of a COVID-19 case, even if they are fully vaccinated. The issue is further exacerbating existing difficult trading due to materials and staff shortages.

The Construction Leadership Council (CLC) proposes that the 16 August relaxation be brought forward as soon as is possible.

The move would incentivise workers to get vaccinated, while alleviating pressures on the delivery of vital construction projects and maintenance of national infrastructure. Construction continues to widely implement the Site- and Branch Operating Procedures to continue to operate safely.

CLC co-chair Andy Mitchell said: “We have reports from across the industry of plants, sites and offices having to wind down activities as staff have been asked to isolate. This is putting very significant pressure on the sector, risking project delivery and even the viability of some firms.

“Where staff are already fully vaccinated, and recognising that such people will be free to work from 16 August anyway, we are asking the Government to bring forward this date for essential industries like construction, ensuring that the industry doesn’t grind to a halt”

The year-on-year decline in construction apprenticeships threatens the Prime Minister’s levelling-up agenda and the UK’s ability to ‘build back better’ from the pandemic, says the Federation of Master Builders (FMB) in response to the Department for Education’s apprenticeship and traineeship data released today.

Apprenticeship starts in construction, planning and the built environment saw a decline from 16,100 in the 2019/20 academic year, to 13,100 in 2020/21, according to the Department of Education.

Apprenticeship starts as a whole saw an 18.5% decline to 161,900 in 2020/21, compared to 198,600 reported for the same period in 2019/20.

Brian Berry, chief executive of the FMB, said: “2,000 fewer new apprenticeships is the opposite of what is needed to tackle the critical skills shortage in the construction industry. In particular, it won’t help small building companies. Currently 38% of Master Builder companies are already struggling to hire bricklayers and 34% are unable to recruit carpenters.”

Berry concluded: “The Government’s levelling-up agenda is at risk if support to encourage and incentivise careers in construction isn’t turbo-charged. Small builders would particularly welcome an extension to the heightened incentive payments for those businesses training apprentices beyond September of this year.”

The latest figures from the Builder Merchants Building Index (BMBI) show year-on-year sales through UK builders’ merchants are on an upward trajectory, as the industry continues to meet sustained high demand for building products. May’s BMBI index was 141.4, with two less trading days. Nine of the twelve index categories exceeded 100.

Total Builders Merchants May 2021 value sales were up 79.6% in May compared with the same month last year, with no difference in trading days. All categories sold more. However, the country was still in full lockdown in May last year, so comparisons with May 2019 are therefore more meaningful and confirm that value sales are up 7.9%, led by Timber & Joinery Products (+28.1%) and Landscaping (+26.5%). All other categories sold less.

Total sales in May were 6.1% lower than in April, with one less trading day this month. All categories sold less. Six categories did better than Total Merchants, with Timber & Joinery Products and Kitchens & Bathrooms doing best, although both down by -1.8%. Landscaping (-14.2%) was weakest. Average sales a day in May were 1.2% lower than April.

Stacey Temprell, Marketing Director British Gypsum, is BMBI’s Expert for Drylining Systems, said: “The speed and strength of the recovery in construction is driving strong demand. This, coupled with challenges for some raw materials in the global supply chain due to the pandemic, and import delays because of changes in procedures post Brexit, has led to lengthening lead times and price inflation for many construction materials. These include timber, plastics, and steel.”

Andrew Simpson, Packed Products Director at Hanson Cement, said: “Managing high levels of demand is incredibly challenging for businesses, their staff and supply partners. Shortages in packaging and pallets, and the availability of hauliers, add to logistical pressures. Similar demand in Europe is impacting on imports too as they hold onto product for their domestic market.”

Cleveland Bridge, the specialist engineering contractor and icon of British construction, has called in administrators, putting hundreds of jobs at risk.

Reports began surfacing after the Northern Echo broke the news on Tuesday evening that staff at the company were told to come in and retrieve personal effects from their desks.

A company statement on Wednesday confirmed that notices warning of redundancy had been issued to all the staff.

The Echo quoted an unnamed member of staff saying the situation was so bad they may not receive any pay and claimed there was now a battle to find a buyer.

The firm’s 2019 results reported turnover up 30% at £48m but warned about delays to project in the UK and Sri Lanka.

Founded in the UK in 1877, Cleveland Bridge is majority owned by the Al Rushaid Group, and produces high-quality structural steel components at advanced manufacturing centres in the UK and Middle East.

Cleveland Bridge, which recently completed major works on the M4 in Berkshire, produces 150,000 tonnes of precision-engineered steel every year in the highways, rail, transport infrastructure, commercial, stadia, industrial, energy and public building sectors.

The company is said to have a full order book for the next 18 months, which might help to attract a buyer quickly. Protecting more than 200 highly skilled jobs in the North East will be another test for the government’s levelling up agenda.

The latest product availability report from the Construction Leadership Council (CLC) has reported material shortages is prices escalating. Labour shortages are being exacerbated by the growing number of employees being required to self-isolate and that shortages could also force smaller, regional developers may be forced to delay starting work.

The CLC Product working group has reported that global demand leading to product shortages, rapid and sustained price inflation, long lead times and uncertainty regarding deliveries.

The products most affected are those used in housebuilding and domestic repair maintenance and improvement (RMI), with bagged cement particularly hard hit due to unprecedented demand which is expected to remain until the end of the year.

Overall, prices for products and materials have increased by a reported 10-15%, consistent with the Office of National Statistics figure for May of 10.2% overall with 12.8% for those most commonly used in RMI.

Specific products, especially timber, has seen increases of 20-50% for most products and over 100% for OSB and other sheet materials. For the first time we have had reports that some merchants are destocking certain products that are no longer economic.

Labour, or rather the lack of it, is a rising concern.  All regions report hauliers/HGV/LGV drivers are in short supply and very difficult to recruit, which is contributing to longer delivery times particularly away from major transport routes and urban areas.

Labour shortages are being exacerbated by the growing number of non-symptomatic drivers, tradespeople, merchant and manufacturing staff required to self-isolate after coming into contact with someone who tested positive for Covid-19. This will further stretch the supply chain.

Looking forward the CLC said housebuilders are managing current builds to completion but there are indications that smaller, regional developers may be forced to delay starting work on new sites until they have more certainty around product availability and lead times.

The CLC report concluded: “Alongside pricing, stability and accuracy of supply remains the overarching concern and regular, accurate and transparent communication throughout the supply chain to the end client is deemed vital by all.  It is important that all parties recognise the extent of the extraordinary challenges we are currently experiencing and adopt a flexible and collaborative approach to finding solutions.”


The Construction Leadership Council has revealed clear targets for the construction industry to unite behind in its mission to drive carbon out of the sector.

The CLC’s new Construct Zero Performance Framework sets out headline commitments for carbon reduction at a sector level, along with a series of measures and metrics to show how progress is being made.

The development of the framework draws on the extensive and detailed work undertaken across the sector by specialist groups and representative bodies to understand their emissions and develop their own plans. The framework seeks to draw these detailed plans together to provide Government and Industry with a comprehensive view at a sector level on progress.

Measures include tracking the number of domestic retrofits achieved, changes in the amount of non-diesel plant in use, and reductions in the amount of energy used to produce key products.

The Performance Framework has been developed in consultation with industry, with more than 2,500 comments received from industry to shape the framework. The commitments map to the nine priorities for carbon reduction outlined by the CLC in March 2021 and is the start of a conversation which will be refined and iterated over time to align with industry and workforce changes.

The headline commitments are:

  • 78% of diesel plants to be eliminated from construction sites by 2035
  • Close the productivity gap between construction and economy average output per worker by 2035
  • From 2025, planning applications from the sector must connect to public/ active transport and include EV charging where parking is provided
  • Working with Government to deliver retrofitting to 27 million homes by 2040
  • From 2025, all new buildings will be designed with low carbon heating solutions
  • From 2025, we will deliver new homes and buildings which will minimise energy demand and reduce emissions in operation by 75% (dwellings) and at least 27% (commercial buildings) compared to current standards
  • Every person buying from the sector (business or member of the public) will be provided with carbon data by 2030 to make informed lower carbon choices
  • From 2022, we will give all our clients the chance to become net zero by offering alternative Net Zero design options to clients, even if not scoped
  • By 2035 we will have reduced construction product emissions by 66% from 2018
  • We will target 1,500 of the sector’s businesses and clients to sign up to a measurable carbon reduction plan (including Race to Zero, Science based Targets or Climate Hub) by 2025 people isolating.

Construction Leadership Council co-chair Andy Mitchell said: “We are seeing huge demand from across the sector to push forward towards Net Zero, and this has been reflected in the level of consultation feedback we received when we tested these metrics with industry. We can have confidence that these measures will help guide us towards a lower carbon future, and I look forward to seeing progress”.

UK Net Zero Business Champion, Andrew Griffith said: “The new Construct Zero framework will give environmentally-conscious industry leaders the tools they need to make a difference.

“By setting clear targets and measures for the construction sector, this framework will help this vital sector take the actions we need to help end its contribution to climate change.”

Mott MacDonald Carbon Management Discipline Lead, Mark Crouch said: “Having measurable metrics for the construction sector and a clear direction of travel is crucial, so we believe the new Construct Zero Performance Framework will be an important tool for decarbonising the sector.”

Download the Performance Framework here. Details of each measure are available on the Construction Leadership Council’s Construct Zero web hub. Data will be gathered on a quarterly basis and published as an industry carbon ‘dashboard’. The first update is due to take place in Autumn 2021.


The lifting of COVID restrictions has been greeted with much excitement, with the buzz of freedom and foreign holidays filling the headlines for the past few weeks. However, Actuate UK, the alliance of leading UK building engineering services firms, warns the sector to be vigilant and follow good practice guidance, developed over the last year, to prevent long lasting impacts on businesses.

Actuate UK, highlights new data from a YouGov survey**, which raises questions about the ability of the UK construction sector to return to pre-pandemic activity levels. The alliance says businesses and government should start planning NOW to avoid winter disruption.

According to the poll, in the year up to May 2021, across all members of staff, small to medium-sized construction firms each lost an average of 29 days every month from staff absent from work.

This figure excluded people on furlough – and Actuate UK say the situation will only get worse as businesses go under or are forced to operate on much-reduced capacity. Moreover, key projects may be delayed or come to a costly halt.

Fiona Hodgson, CEO of Actuate UK member SNIPEF, said: “As the restrictions ease, Actuate UK urges industry to strike a balance when considering the health of its workers and the need to move the economy forward.

“This survey gives us grave concern about the long-term effects of COVID on our industry. Building services are the lifeblood of all major construction projects, with heating, lighting, ventilation and digital infrastructure essential to successful project delivery.

“Yet we continue to hear from members there are simply not enough skilled installers to meet current demand. With fewer apprentices being recruited during the pandemic this has exacerbated the issue and we are deeply concerned this will impact on Government targets and future projects.”

The government is currently looking at construction to lead the post-pandemic recovery, funding new infrastructure projects such as the New Hospitals Programme in England and the electrification of the UK’s road and rail networks.

However, Actuate UK says that with a significantly reduced workforce, it won’t be possible to keep pace with demand – and key projects could suffer as a result.

Andrew Eldred, the ECA’s Director of Skills and Employment said: “We’re hearing first-hand accounts of construction firms being unable to recruit skilled staff, despite full order books. And this is only the start.

“The pandemic has had repercussions for training; the number of new entrants coming into the workforce has declined. The difficulties of gaining practical experience, along with reduced numbers starting apprenticeships has taken its toll.”

The spectre of long COVID throws another shadow on the horizon, with recent figures from the Office for National Statistics (ONS) showing that 385,000 people in the UK have lived with symptoms for a year or more.

Although vaccination can help guard against the initial impact of COVID itself, sufferers can experience brain fog and fatigue caused by long COVID, preventing them from returning to work.

Andrew added: “While life may return to ‘the new normal’ for many in the coming weeks and months, for others, the long-term impact of the pandemic will remain a very real barrier to work.

“The knock-on consequences of this and the skills shortage could be all too real for individuals, businesses and the economic recovery itself, so it’s vital that we factor in contingency plans and take steps to protect our workforce”.

You can read up to date Guidance for COVID safe practices from members of Actuate UK on the website ( ) and the latest Construction Leadership Council’s Site Operating Procedure Guidance is available on their website (

After 18 months of operating government backed Site Operating Procedures to battle the pandemic the construction industry starts a new era, despite growing at rising infection rates rise.  Monday 19 July sees the majority of legal restrictions lifted and could lead to the return to more pre-pandemic working practices. However, construction plans to keep COVID-safe guidance and retain a mixture of site operating procedures, flexible and hybrid working.

Industry sources suggest there are hardly any plans to sweep away new ways of working and that firms intend to retain sensible use of COVIS-19 operating procedures to prevent the rising rates of infection leading to workers having to isolate.

During the first week of July, more than 500,000 people in the UK were contacted by the NHS app and told to isolate. But with a skills shortage being faced construction firms it’s proving difficult to find replacements for people isolating at short notice.

The construction sector has faced significant challenges during the pandemic and the Construction Leadership Council has said the sector should be very proud of the way people and projects have dealt with the restrictions imposed over the last 18 months.

The CLC Site Operating Procedures and Branch Operating Procedures have played an essential role in enabling the industry to continue working safely throughout the various lockdowns and their adoption on over 99% of sites ensured consistency across the supply chain.

The Site Operating Procedures and Branch Operating Procedures have always reflected the latest Government guidance. Whilst COVID-19 remains widespread across the UK and will need to be managed for some time to come, the lifting of the remaining legal restrictions, including social distancing requirements, from 19 July 2021 means the CLC guidance will no longer be current.

As such, the Site Operating Procedures and the Branch Operating Procedures will remain available as reference documents from 19 July 2021.

A CLC statement recommended that face coverings should be worn in crowded and enclosed spaces when people mix with others they don’t normally meet: “Whilst it would be inappropriate for the CLC to seek to impose on the industry any requirements over and above those set out by the Government, we recognise that businesses across the supply chain have welcomed the consistency that the CLC guidance has provided. They may choose, or be asked, to maintain elements of social distancing for the time being, in which case the Site Operating Procedures and Branch Operating Procedures should continue to be followed.”

The CLC guidance may also assist in carrying out risk assessments as working arrangements are reviewed and revised, and the CLC would advise that any changes to social distancing measures are discussed with the workforce.

The Site Operating Procedures and Branch Operating Procedures have helped the industry to adopt some good practices over the last 18 months, including more organised sites, enhanced welfare facilities, increased ventilation and improved communication with the workforce, which the CLC would strongly recommend are retained.

The requirement for close contacts of people in England who have tested positive for COVID-19 to self-isolate will remain in place until 16 August 2021. From that date onwards, close contacts will not have to self-isolate if they have received both doses of the vaccine or are under 18. They will be advised to get a PCR test and if it is positive then they will still need to self-isolate for 10 days.