This month [August] has seen a slight easing of shortages for building materials, with John Newcomb and Peter Caplehorn, co-chairs of the Construction Leadership Council (CLC) Product Availability Group, citing a combination of the holiday period and domestic customers delaying or cancelling projects as the reason.
Roofing products, timber, cement, bricks, blocks and insulation were all amongst materials that were in the shortest supply but while product and material price inflation has slowed, indications showed that prices won’t stabilise until 2022, with some manufacturers still to implement double digit price increases to recover current and future cost inflation.
Lack of hauliers
Now, the focus is on the shortage of hauliers. The lack of drivers has caused some suppliers to ask for merchants to collect their orders since they are unable to deliver them. Regional distribution is a particular issue, with some finding challenges arranging deliveries to Scotland and the Southwest of England.
In response, the Department for Transport is engaging with the freight sector and hauliers to look at both interim and longer-term solutions. John and Peter said this will require collaboration between the government and the sector.
Imports
Meanwhile, container shipping continues to affect imports, with key ports in China suffering reduced capacity due to the pandemic and the backlog extending beyond throughout distribution centres worldwide which is set to continue through the peak Christmas season and into 2022.
However, while container prices remain high, these rates are not sustainable in the long term and when demand signals change, we are likely to see prices reduce.
HS2 and product demand
Looking forward, the group discussed the requirement for aggregates and other key products when HS2 demand is at its peak in 2022/23, which will be a concern for smaller builders who have struggled to compete for supplies lately.
Projected volumes are being shared with industry trade bodies, key suppliers and the CLC Product Availability Group to help provide greater clarity and confidence about the industry’s ability to deliver HS2 as well as all other projects.
>> To read the latest news about the material shortages, click here.
