The combined impact of Brexit and the COVID-19 pandemic has led to unprecedented materials shortages within the UK construction sector. If you’re planning a building project, such as a new renovation, or building a new home, you should be aware of the likely impacts this will have on your building project.
Why is there a building materials shortage?
Since the start of the pandemic FMB members have reported difficulties in buying many of the materials that they need, as global demand continues to outstrip supply, leading to product shortages, long lead-in times and rising prices.
While logistical challenges posed by closed borders and lockdowns have impacted on the availability of imported products, those made in the UK have also been in short supply, driven by a surge in housebuilding and large-scale infrastructure projects, such the High Speed 2 (HS2) rail project.
Private housing repair, maintenance and improvements has been the quickest construction sector to recover since the initial national lockdown. This is due to demand for better quality outdoor space and home office work environments, and most SME contractors are reporting projects lined up for at least the next six months.
There has also been a growth in DIY projects, prompted by people spending more time in their homes, and having more disposable income as a result of lockdowns. Companies such as Kingfisher, owner of B&Q and Screwfix, have reported a surge in sales and profits for 2020.
Why are material prices rising?
Increasing demand has led to rising costs, and the Construction Leadership Council has reported that products used in housebuilding and domestic repair maintenance and improvement are the most affected. These include bagged cement, timber, insulation, kitchen carcassing, and roofing and landscaping products, with price hikes of 10-15% (at least 50% for timber).
According to a report in The Times in May, the UK's largest builders’ merchants, Travis Perkins, emailed customers outlining a 15% price rise for bagged cement, 10% for chipboard and 5% for paint, earlier this year. Other merchants have done similar, and more than once.
The delivery of products has also been impacted due to congested shipping routes and container cancellations, as well as a shortage of lorry, leading to longer lead in times and putting pressure on supply.
Key findings from the FMB's State of Trade Survey for Q2 2021 include:
- Workloads and enquiries are at their highest levels for a decade
- 71% of builders are receiving higher numbers of enquiries for future work, compared to Q1 2021
- 53% of builders are struggling to hire carpenters/joiners, and 47% are struggling to hire bricklayers
- 98% of builders are facing material price rises, with the same number expecting this to continue into Q3 2021
- 80% of respondents have been forced to raise their prices in the past quarter
What does this mean for my building project?
The above factors have come together to create a perfect storm for builders, affecting the cost and duration of projects, which is largely outside of their control.
Regular communication with your builder, is vital to the smooth running of a project, as is willingness to adapt to the ever-changing climate.
Prices are unpredictable and can increase rapidly, meaning that quotes can be subject to change, so most builders will insert some flexibility into contracts and tenders.
Long lead in times for products and materials means that delays are likely and while your builder will always aim to complete the job within the agreed timeframe, it is sensible to plan for it to overrun.
Where a certain material/product is not available, or costs have risen try discussing alternative options with your builder.
Try to remain patient with your builder and be careful not to compromise on quality and customer service by defaulting to one offering a cheaper quote / quicker completion time. Prices that are unusually low are likely too good to be true, and are often an indication of a cowboy builder.
How long will it last?
The materials shortages look likely to continue for the rest of the year, as record sales of building materials, strong pre-orders and full pipelines of work continue to put pressure on the supply chain.
This is a global problem, and the whole of the UK construction industry is facing unprecedented demand. The FMB forms part of the Construction Leadership Council Products Availability Group, which brings together builders and representatives of the merchants and manufacturers to share information. FMB members regularly attend these meetings and share feedback on the shortages being faced by SME builders.
The FMB regularly shares updates on the building materials shortages and you can keep up to date on the dedicated campaign page.