Shortages and escalating prices may force delays in new work starting

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.”