Material prices are soaring, says FMB

A third of small building firms say that soaring material prices are squeezing their margins and almost a quarter have had to pass these price increases onto consumers, according to the latest research by the Federation of Master Builders (FMB).

Construction SMEs have reported a range of material price increases since the depreciation of sterling following the EU referendum in June 2016. Small building firms were asked which materials have increased the most and the results were as follows:

1) Timber
2) Insulation
3) Bricks
4) Blocks
5) Windows
6) Plasterboard / slate (joint sixth)
7) Boilers and radiators
8) Porcelain products

The impact of these material price increases have been wide-ranging and include:

• 85% of builders think material price rises could drive consumers to hire rogue traders in an effort to save money on their building projects;
• One third of construction SMEs (32%) have had their margins squeezed;
• Almost one quarter (22%) have been forced to pass material price increases onto their clients, making projects more expensive for consumers;
• More than one-in-ten builders report making losses on their building projects due to material price increases.

Brian Berry, chief executive of the FMB, said: “Material price increases have left builders under severe pressure. This research shows that following the fall in the exchange rate, timber is the material that the majority of builders say has increased most in price but the problem doesn’t end there – everything from insulation to windows to bricks and blocks are soaring in price.

“A third of builders report that these price increases are eating into their already razor-thin margins – and this on top of increased wages and salaries stemming from long-term construction skills shortages. Furthermore, one-in-ten builders say that they’ve actually made losses on projects due to material price increases – this is most likely to happen when a particular product or material jumps up in price mid-project when then builder has already quoted for the work. Perhaps unwisely, some builders are absorbing these extra costs as opposed to re-quoting for the project.”