The construction sector faced a steep decline in 2020/21 due to the pandemic. This caused a severe shortage of building materials which is likely to continue creating supply chain pressure going into 2022 and the foreseeable future. The shortage in construction materials has impacted the industry and seems to be easing even though increased prices and longer lead times are still expected.
Overall, construction activity has been on a downtrend and the rise in concerns relating to the Omicron variant has caused a disruption in the supply chain.
According to the Construction Leadership Council (CLC), the most affected products in terms of availability are those used in housebuilding, and the domestic repair maintenance and improvement sector.
Update on the building materials shortage
A shortage in key supply items such as steel, cement, timber and roofing tiles have severely impacted the construction section throughout 2020/21. This has led to a substantial rise in prices across several materials used by the industry. For example, at the height of the pandemic the price of roof battens almost doubled.
According to BEIS Building materials and components statistics report, the material price index for “All Work” increased by 24.5% towards the end of 2020. Furthermore, cement production fell by 11.4% in 2020 further indicating less demand and thus, building materials shortage.
It was also mentioned by the co-chairs of the CLC’s Product Availability working group, John Newcomb and Peter Caplehorn, that the increasing prices and the rise in energy costs in addition to the Omicron variant scare, are among the factors for the shortage in raw materials.
Furthermore, the CLC also warned of the shortage in bricks and timber which is a cause for concern.
Materials that are most affected
The roofing market has experienced a shortage of concrete roof tile, according to the National Federation of Roofing Contractors (NFRC). The demand for clay roof tiles is also outpacing the availability of materials. This lack of supply is causing lead times to rise, with some contractors saying they expect to wait 24 weeks or more before they receive their orders.
Bricks and blocks
Building contractors and developers are being warned to expect higher prices for bricks and blocks, in the face of a supply shortage that is expected to last until 2022. The CLC says there are “ongoing challenges” with bricks and blocks supply, leading to strong demand for these construction materials.
The timber shortage that surfaced in 2021 appears to have eased, with the Timber Trade Federation reporting record-breaking lumber imports in October. However, the CLC also warned that border congestion both in the UK and at Scandinavian ports may lead to reduced supplies and higher prices the following Spring.
As mentioned above, cement production fell by 11.4% in 2021. Supplies of bagged cement has been stagnant since late last year. According to CLC’s latest update, they are expecting the prices to increase in lieu of supplies falling and the market not being able to cope with the demand.
Are Building Material Prices Going to Stop Rising?
The longer lead times, shorter supply and the rise in demand for building materials has largely contributed to the rising prices. This has caused concern for builders and manufacturers as they have not been able to build up stock levels.
According to the latest House Builders Survey by the Federation of Master Builders, 62% of respondents reported that they are currently struggling with building materials shortage.
Furthermore, house builders have been grappling with the increased scarcity of building materials, along with higher costs for many of these materials. This has impacted deliveries and the cost of building new homes.
So, what does this all mean? When will it all settle down?
It is expected that the demand of new buildings will reduce as a result of rising prices which will eventually lead to an ease in the pressure on the pricing for the construction materials market. However, there is currently no certainty in terms of timeline.
What caused the building materials shortage?
The construction materials supply shortage began in 2020 as a result of the European Union as a result of a production slowdown in some factories due to lockdowns imposed in lieu of the pandemic. The shortage was further exacerbated as a result of the construction output reaching a 24-year high in June 2021 and the supply could match the demand.
There were further issues that caused a disruption in the supply side:
- Lack of lorry drivers: The pandemic has caused a vast reduction in the lorry drivers with the shortage amounting to around 100,000 drivers in the UK according to the survey Road Haulage Association.
- Labour shortage: In certain areas, the labour rates have increased sharply as a result of shortage in labor supply. The contractors have drastically increased their hourly rates due to being overwhelmed by workload. This has contributed drastically towards supply shortage and in turn the entire supply chain
- Uncertainty due to Covid-19 pandemic: According to ElectricalDirect, the import of building materials have reduced by more than £2m which had a direct impact on the industry.
- Raw Materials: Globally, there has been a shortage in construction raw materials due to the rise in global demand of new construction projects.
- Brexit: The impact of EU workers leaving the UK as a result of Brexit has affected small time construction companies. A change in immigration laws has resulted in specialist contractors who left due to pandemic finding themselves unable to return to the UK.
How is this going to affect you?
The shortage and rising prices surely can impact your building work and as such, planning in advance is extremely important.
At SPS Roofing, we are fully aware of the challenges that one could face as a result of material shortage. With over 25 years of experience in the construction industry, we have fully prepared ourselves to face these challenges.
We understand how this must be frustrating for you especially if you are planning to start a new roofing project or any other construction project for that matter. Should you need assistance with anything, we are more than happy to provide free consultation and help you along the way so you will have less things to worry about.
If you would like to learn more or plan ahead for an upcoming project, then please feel more than welcome to contact our team and book in a consultation today!