Construction Materials | Lack of Supplies and Skyrocketing Prices
Posted by Ola Bujak, Graduate Recruitment Consultant on Wednesday, September 8, 2021
In recent months, the UK has been experiencing a significant shortage of building materials putting a lot of building and construction companies under pressure and making it almost impossible for regular customers to go ahead with their DIY projects.
The Federation of Master Builders stated some companies in the construction sector might be forced to put their projects on hold whereas others might have to shut down completely as a result. According to the organisation, it is going to be the small and local builders who take the hardest hit. The Construction Leadership Council alerts that timber, steel, paints, cement, and some electrical components are all in a short supply already.
Developers not only have to deal with the shortages but also with the skyrocketing prices. According to Henry D’Esposito, JLL’s senior research analyst, the growth of the building material costs is going to outpace all other elements of construction cost increases this year. The Office of National Statistics predicted a 7-8% rise in building material prices with increases for certain materials more than doubling throughout the year.
These issues stem from several factors, first one being the increase in shipping costs caused by the shortage of shipping containers resulting from pandemic-related issues. The cost of shipping a 40ft container from Asia to Europe used to be £1,061 in the summer of 2020. The number rose to £5,873 by May 2021. It is partially caused by an unbalanced recovery throughout 2021. Some countries are already exporting more goods than they did before the pandemic, whereas others struggle to get back on track.
Additionally, the number of construction projects in UK has significantly risen since the easing of lockdown restrictions causing even higher a demand for materials that developers were already struggling to get. Increased domestic activity does not help, as a lot of people who were in quarantine decided to start their own DIY projects renovating their kitchens and bathrooms which is draining the resources even more.
Finally, there have been shipping issues with specific products. Warmer winter negatively affected the production of timber in Scandinavia whereas much colder winter in Texas reduced the production of polymer, chemicals, and plastics. Since UK imports many of the raw materials, the prices have gone up significantly. Brexit is also going to affect the import of timber as 80% of softwood comes from European Union, and the costs of shipping it in are expected to go up.
With the current situation and the increase in prices, many homeowners and construction companies in UK are choosing to delay their projects hoping that the resources are going to become more affordable again.
Despite all of the abovementioned issues, experts predict that the construction industry will still be blooming in the upcoming months thanks to the easing of restrictions and companies wanting to bounce back after lockdown. The advice for construction recruitment companies and candidates wanting to get into the construction industry sector is to make sure to investigate the firms they want to work with and make sure they have secure material supply chains.