{"id":94515,"date":"2021-06-08T12:21:46","date_gmt":"2021-06-08T11:21:46","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=94515"},"modified":"2021-06-08T12:21:46","modified_gmt":"2021-06-08T11:21:46","slug":"building-materials-shortage","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/building-materials-shortage\/94515\/","title":{"rendered":"2021 building materials shortage: What is the price of building materials?"},"content":{"rendered":"

Covid-19, Brexit and booming demand are combining to drive up prices for the essential materials the UK\u2019s construction sector desperately needs. Bluebeam<\/a> takes a look at the 2021 building materials shortage<\/h2>\n

The UK\u00a0government has made much of its ambition to\u00a0\u201cbuild back\u00a0better\u201d\u00a0as part of its strategy to drive growth across the economy. \u201cBuild, build, build<\/a>,\u201d it cries. Build more and better homes, deliver new transport infrastructure\u2014roads, railways, airports, etc.\u2014and\u00a0get cracking on more commercial, office and retail space.<\/p>\n

It sounds great. But as laudable as the government\u2019s building ambitions are, the\u00a0emergence\u00a0of the\u00a0Covid-19\u00a0pandemic, coupled with the impact of Brexit, has\u00a0created\u00a0problems for the country\u2019s construction industry, one of them being a building materials shortage.<\/p>\n

Demand for materials has inevitably risen, yet supplies have slipped, and prices are rising.<\/p>\n

The good news is that after a torrid 2020, construction activity regained some momentum in the first weeks of 2021, with projects previously delayed by the pandemic starting to stir.<\/p>\n

A slowdown in\u00a0homebuilding\u00a0was \u201cmore than offset\u201d by the sharpest rise in commercial work since last September<\/a>, according to the\u00a0latest\u00a0IHS Markit\/CIPS UK Construction Purchasing Managers Index.<\/p>\n

\u201cSurvey respondents commented on contract awards for commercial building that had been delayed earlier in the pandemic and some reported a boost from infrastructure work related to major transport projects,\u201d the\u00a0report\u00a0said.<\/p>\n

However, it has taken longer to get things started than many would have liked. Why?\u00a0The pandemic\u00a0has certainly played a major role. But there are other factors.<\/p>\n

Shortages:\u00a0A\u00a0perfect\u00a0storm of\u00a0cost\u00a0burdens<\/h3>\n

According to IHS Markit, February saw transport delays<\/a> and stronger demand conditions, stretched global supply chains, greater shipping charges and rising commodity prices. These combined to deliver the sharpest increase in average cost burdens across the construction industry since the summer of 2008.<\/p>\n

Brexit, billed by the government as the chance for the UK to forge its own destiny, has come in for a lot of flak in recent months. The UK\u2019s departure from the EU has been cited as creating a potential shortage of labour in the domestic construction industry, as foreign workers have chosen to leave the country or stay away after trips home.<\/p>\n

Meanwhile, changes to customs rules immediately following Brexit have\u00a0slowed\u00a0imports of building materials and other goods, as border officials grapple with new paperwork covering trade between the E.U.\u00a0and\u00a0U.K., putting more pressure on prices\u00a0and creating a\u00a0building\u00a0materials\u00a0shortage.<\/p>\n

Yet the latest IHS Markit survey<\/a> suggests the worst of the Brexit squeeze may have eased.<\/p>\n

According to\u00a0Duncan Brock, group director at the Chartered Institute of Procurement & Supply, which teams up with IHS Markit to collect industry data, \u201csupply chain managers found themselves spinning a number of plates with creative ways to get stock, including sourcing more local supply for some\u201d.<\/p>\n

Looking closer to home for vital materials may work for some, but many firms are still reliant on them being shipped to the UK from overseas.<\/p>\n

Complex\u00a0situation<\/h3>\n

A\u00a0joint statement<\/a> by the Builders Merchants Federation (BMF) and Construction Products Association (CPA) suggests that while the ongoing impact of Covid-19 has been behind a series of shortages and price increases, the overall picture is \u201cmore complex\u201d.<\/p>\n

For example,\u00a0strong\u00a0global demand\u00a0for steel\u00a0is resulting in shortages, order backlogs and increased prices for most products.\u00a0And while supply and demand issues were likely to rebalance within the next few months, \u201cglobal dynamics may continue to drive prices up\u201d.<\/p>\n

The U.K.\u00a0construction industry should be prepared for the high price of timber to continue for the foreseeable future, the BMF\/CPA said, with production in traditional timber-growing countries easing off in 2020\u00a0vs.\u00a02019.\u00a0Sweden saw production down 7%, while in Finland production was 15% lower.<\/p>\n

John Newcomb, chief executive of the BMF and co-chair of the Construction Leadership Council\u2019s Brexit\u00a0movement of\u00a0building\u00a0products and\u00a0materials\u00a0group,\u00a0said recently<\/a>\u00a0that timber prices were surging by 20%.<\/p>\n

This is telling, not least because timber has undergone a surge in popularity among many house builders, being seen as an effective and\u00a0environmentally\u00a0friendly solution to delivering new homes quickly.<\/p>\n

It also ties in with the push for the use of modern methods of construction across the country. While the construction industry has been relatively slow to take up new technology, some U.K.\u00a0companies have taken advantage of overseas interest\u2014and\u00a0welcomed inward investment.<\/p>\n

Tokyo-based housebuilding giant Sekisui House, for instance,\u00a0took a 35% equity stake in Manchester-based housebuilder and developer Urban\u00a0Splash\u00a0two years ago<\/a>.\u00a0Yoshihiro Nakai, president of the Japanese firm, noted that the use of modern methods of construction to build\u00a0high-quality homes with short build times\u00a0was\u00a0\u201cone of our company\u2019s great strengths\u201d.<\/p>\n

Modern\u00a0methods,\u00a0market\u00a0forces<\/h3>\n

The use of modern methods of construction and factory building\u00a0programmes\u00a0will go a long\u00a0way\u00a0toward\u00a0improving quality and production efficiency, but manufacturers will still be at the mercy of market forces when it comes to\u00a0the\u00a0building\u00a0materials\u00a0shortage.<\/p>\n

A separate CPA\u00a0survey<\/a>\u00a0conducted in\u00a0January\u00a0found that nearly a quarter (23%) of its members involved in heavy activity\u2014that is to say\u00a0aggregates, cement, ready-mix concrete, structural and reinforcing steel\u2014believed\u00a0getting hold of the\u00a0building\u00a0materials they needed would be the primary constraint over the next year, the highest such proportion since the CPA began polling its members in 2008.<\/p>\n

When it comes to another construction staple\u2014roofing\u2014\u00a0material supplies are also an issue.<\/p>\n

Nearly half (49%) of member firms of the National Federation of Roofing Contractors (NFRC) said the lack of roofing tiles topped their list of concerns.<\/p>\n

According to the NFRC,\u00a0building materials\u00a0shortages were having a knock-on impact on material prices, with\u00a0three-quarters (76%) of firms reporting inflationary pressures in the\u00a0past year, and more than two-thirds (65%) of roofers saying that prices have\u00a0increased\u00a0in the previous quarter.<\/p>\n

Builders are no strangers to shifts in the price of the raw\u00a0materials. But few would have\u00a0forecast\u00a0the near-perfect storm that has swept through the sector in the\u00a0past\u00a0year.<\/p>\n

Thanks to Covid-19, Brexit and other factors, the past year has given the UK construction sector little comfort. It is only now starting to recover, and tentatively at that.<\/p>\n

The industry will be hoping for calmer\u00a0and\u00a0more predictable conditions in the year ahead.<\/p>\n

To hear more from Bluebeam, head to Built, the Bluebeam Blog<\/a><\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

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