Home News Semiconductor and driver shortages add to supply chain woes

Construction supply chain shortages have not changed according to the  latest statement from the Construction Leadership Council’s (CLC) Product Availability working group. While August has seen a slight improvement, the sector is now suffering from semiconductor shortages and continuing weakness in logistics capacity.

Timber, cement, roofing products, bricks, blocks, insulation, steel and cable management systems remain the products in shortest supply, while global shortages of semiconductors are a cause for concern in the lighting and appliance sectors.

Although product and material price inflation has slowed, indications are that it will be 2022 before prices stabilise, with some manufacturers still to implement double digit price increases to recover current and future cost inflation.

Haulage, however, and the lack of availability of drivers, are now the major concerns affecting distribution with some suppliers asking builders merchants to collect their orders as they cannot get enough drivers to complete deliveries. Regional distribution is a particular issue, with some finding challenges arranging deliveries to Scotland and the South West of England.

During August the market has seen some reduction is shortages but this is most probably due to a combination of the holiday period and some domestic customers delaying or cancelling projects due to higher costs or cost uncertainty.

John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the CLC Product Availability Group said: “The problem is not limited to our sector, and with similar haulage issues affecting a wider distribution network there is no short-term fix. The Department for Transport is engaging with the freight sector and hauliers to look at both interim and longer-term solutions, which require collaboration between government and the sector.”

Container shipping continues to affect imports. Key ports in China are suffering reduced capacity due to Covid, but the backlog extends beyond China throughout distribution centres worldwide. This is forecast to continue through the peak Christmas season into early 2022. With capacity at a premium, container prices remain high; however, these rates are not sustainable in the long term and when demand signals change, prices are likely to fall.

Looking forward, the group discussed the requirement for aggregates and other key products when HS2 demand is at its peak in 2022/23. This is a particular concern for smaller builders, who have struggled to compete for supply during the current period of extraordinary demand.

Manufacturers and trade associations are providing updates on their own areas. The latest include:

Timber Trade Federation

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