Construction Prices Rising and Lead Times Growing

From the UK’s largest construction firms to man and his shed, the British construction industry is in a supply crisis.

Jesse’s Diets – The Fast Show – Man and His Shed

From roof tiles, steel and timber, to paint, kitchen sinks and insulation – products are scarce in the British building industries supply chain. And, when they can be found they are increasingly expensive.

To get into the nitty gritty of it, timber costs 80% more than it did in November last year, steel joists are more expensive due to an increase in the price of iron ore and plastics are up in price by 60%.

“It seems to be almost, everything that you need for doing domestic building or any sort of construction” (has increased in price) “the only thing we’re not seeing shortages of is PPE”

Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply.

Now the industry is asking people even to delay their own DIY and home improvement projects due to shortages of cement, electric components and metals.

“Demand has increased so rapidly…Construction output in April 2020, at the nadir in the initial lockdown, was 45% lower than a year earlier. By March this year, it was already above pre-Covid levels.”

Noble Francis, Professor of Construction Economics at University College London and Economics Director at the Construction Products Association (CPA).

Global shipping is still struggling with the disruption caused when Covid first hit and empty containers were stacked up in western ports instead of returning to China. The cost of sending a container from China to northern Europe jumped from US$1,475 in May last year to US$8,303 last Friday, according to the Freightos Baltic Index.

Material price increases over the last 12 months

  • Iron Ore – up 88%
  • Copper – up 49%
  • Steel – up 25%
  • Aluminium – up 23%
  • Sawn wood – up 30%
  • Plywood – up 20%
  • Gravel, Sand, Clays and Kaolin – up 20%

Sources: Aecom, Core Five, BEIS

Brexit also plays its part.

Some smaller EU exporters have given up on the UK because of new trade barriers, according to Building magazine.

The UK could run out of key materials because there are not enough facilities to test them and provide the new UKCA certification which replaces the European CE quality mark.

Peter Caplehorn, Chief Executive of the CPA

Where do the UK’s supplies come from?

Bricks and bulky materials like sand and gravel are almost all locally produced – 76% of materials are made in the UK – but about two-thirds of sawn wood is imported, according to the Forestry Commission. Much of it comes from Europe, particularly Sweden.

Timber – ‘One of the worst affected product areas’

In its market statement for May, the Timber Trade Federation (TTF) said stock levels were languishing due to high international demand, which had prevented UK-based buyers from rebuilding their stock since the beginning of the pandemic. Demand for timber has skyrocketed in the UK and elsewhere, as housebuilders move to catch up on the progress they missed during the lockdowns, the TTF claims. The ever-larger focus on net-zero construction has added to demand, as timber has large carbon-storage potential.

Cement – ‘Broadly back to normal’

Cement was added to the CLC’s list of items facing shortages back in April. But supply has improved, according to Mineral Products Association (MPA) chief executive Nigel Jackson. Deliveries of bulk cement, which makes up most of the UK market (over 80 per cent), are “broadly back to normal”, he told CN. “We’re not aware of any projects impacted by bulk cement shortages,” he said.

For bagged cement (equal to around 18 per cent of all cement sales in the UK), shortages first seen in February continue, partly due to an increase in demand as the industry began to open up following the lockdown.

Unlike timber, the vast majority of cement used in the UK is produced in the country. Jackson said producers will be able to “flex” to meet demand, and the shortages in bagged cement should be resolved in a few months.

Delivery delays

Material2020 delivery times April 2021 Delivery times
Timber2 days10 days 
Roof battensFrom stock1 month
MDF5-7 days4-6 weeks
Aluminium cladding8-12 weeks26 weeks
Cold rolled purlins6-8 weeks20 weeks
Insulation 7-10 days3-4 weeks
Aggregate2 days1 week
CementFrom stock2 weeks
Concrete blocks2-3 days3 weeks
Roof tiles6 weeks6 months
Table showing construction material delivery delays over 2020-2021

Source: compiled by Beard from a range of suppliers

The re-emergence of the construction sectors in China and the US this year have been a key driver in escalating the problems caused by shortages of products that have been hampering firms since the start of the pandemic.

For now, the position stands with the construction industry asking people not to commit to DIY projects, the government working hard to re-stock the builders and traders across the UK. But ultimately, even if you are a small builder or a major contractor, you can’t build, build, build if you don’t have the materials – so for now it’s a waiting game.

Let us know if you’ve been affected by these material shortages.

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