Contractors primed for fresh wave of price increases

Materials producers and distributors are warning contractors to brace for another round of big price increases driven by high energy costs.

They also warn that while demand for construction products has eased off from the peak seen in the spring, it will be deep into next year before logistic issues start to be resolved.

Logistics and road haulage specialists have warned that not to expect any improvement in the shortage of HGV drivers until the first quarter of 2022 at the earliest.

The warning of continuing supply challenges into next year came from the co-chairs of the Construction Leadership Council’s Product Availability working group.

John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, said that while product supply has improved in some areas, several critical challenges remained, particularly around logistics and related labour shortages, and rising product and input costs.

“There are also warnings that high gas and electricity costs and associated carbon costs, which are impacting both UK and overseas ‘heavy-side’ manufacturers, will soon lead to significant price increases for ceramic products, glass, steel and bricks,” they warned in a joint statement.

“Cement supply, for example, though struggling is holding steady; however, prices are likely to increase over the next few months due to increased energy costs.

“This will also have a knock-on effect on the price of concrete products.”

Bricks

Manufacturing capacity for bricks is at its maximum and some brickmakers are investing in expansion, but exceptional demand has depleted current stock to a low level and the gap is being bridged with imported products.

Extended lead times are predicted to continue at least until the second half of next year. In the longer term, the outlook is far better with additional capacity due to come on stream in 2023.

Roof tiles

Likewise, the exceedingly high demand for roof tiles has hindered stocks from being replenished although manufacturing is at full capacity. Manufacturers warn that driver shortages are a major impediment to shortening lead times, which will hopefully ease from the spring of next year.

Timber

Timber is becoming more readily available and the price has fallen for some imported timber products. But importers have cautioned that stock is still being delayed at the ports here and abroad.

Sanitaryware

Bathware and sanitaryware imported from Asia is subject to disruption in shipping, which is unlikely to be fully resolved until 2023 when additional shipping container capacity is expected.

Paint

Paint and coatings products continue to be affected by global raw material shortages and supply chain issues resulting in increased lead times for some products as well as rising prices.