Supply chains relax as sector sees a seasonal decline in activity

Credit: AdobeStock / Kirill Gorlov
Credit: AdobeStock / Kirill Gorlov

The co-chairs of the Construction Leadership Council’s (CLC) Product Availability working group says they are seeing an improvement in the supply chain across all regions in the UK.

However, the statement from John Newcomb and Peter Caplehorn said that this is largely due to a seasonal decline in activity. Despite efforts to relieve the supply and demand issues, the challenges with transport logistics and UK production capacity remain and will likely return next year as construction activity picks up again, with longer lead times and further price increases anticipated.

Furthermore, despite precautions being taken by merchants and manufacturers, the rapid increase in cases of the Omicron variant of COVID 19 is likely to impact production and operations into 2022.

The uncertainty around delivery and price has a disproportionate impact on SME builders working mainly on domestic repair, maintenance and improvement projects, where clients want price certainty before the project begins.

Therefore, the CLC is encouraging all sectors to continue to work closely and collaboratively to manage challenges and plan future work.

Looking more closely at current and future challenges:

  • Bricks and blocks remain in short supply for the reasons outlined in the CLC’s last statement. Demand is expected to be strong well into 2022, so imports may be necessary to a make up a shortfall in UK production until new production lines come on stream in 2023/24.
  • While there are few issues with cement stocks at the moment, merchants are being asked to not to deplete stocks in their yards in preparation for the annual winter round of maintenance shut-downs. Manufacturers have committed to produce as much as they physically can, but supplies will typically decrease during this time. Manufacturers have also raised concerns that rising energy costs will likely lead to price inflation.
  • Demand for roof tiles remains high, with lead times averaging 24 weeks.
  • Supplies of many timber products have returned to more normal levels and prices have fallen from highs, particularly for structural timber, however tongue and groove remains in short supply. Looking ahead, continuing congestion both here and at Scandinavian ports may lead to reduced supplies and higher prices in Q1 2022.
  • Pressures on global shipping, including delays and volatile prices, look set to continue well into 2022. In addition to ongoing disruption stemming from China’s sustained ‘zero’ policy about COVID-19 outbreaks, performance issues at Felixstowe have led some major shipping lines to divert vessels headed there from Asia to other, smaller ports in the UK.
  • The logistics sector reports recent progress with the government providing additional training opportunities and grants to get more HGV drivers on the roads. With driver wage increases and flexibility in working making the industry more attractive, hopefully driver shortages will have less impact on the sector in 2022.