The lack of available supply for vital construction materials such as bricks, steel, cement, timber, and paint, has been caused in part by large steel plants and factories being closed during lockdown, and compounded by the ongoing disruption of the UK leaving the European Union.

Despite all this, Eden Facades remains committed to supporting clients in keeping their projects moving forward by drawing on our experience of varied sectors and building types as well as our knowledge of the market.

Fastest rates of growth

As much of the UK reopened earlier this year after months of uncertainty, the global rise in demand saw May record the fourth consecutive month of construction sector growth, with housebuilding growing at the fastest pace in seven years and commercial work rising at its fastest rate since August 2007, according to the IHS Markit/CIPS UK construction PMI survey.

But 71% of contractors reported facing material shortages at the beginning of the year, and the Construction Leadership Council (CLC) has warned the industry that the situation is unfortunately likely to get worse before it gets better.

The impact of price rises and struggling supply chains puts pressure on project timeframes and budgets which is being felt by contractors, sub-contractors and clients alike.

What is the knock-on effect?

1. Rising material and shipping costs

In an industry where material prices and availability are traditionally fairly stable, the volatility of the current market is making it hard to plan for unexpected costs and delays. Where previously the price for SFS materials may not increase at all for a year or two, this year it will have increased by up to 40%.
Not only are the materials themselves more expensive, the shortage in supply of shipping containers has also resulted in increased haulage prices, with additional surcharges being passed on to contractors and sub-contractors of between 7% and 20% a month.

2.  Driver shortages

Finding new HGV drivers is taking longer than normal due to HGV tests being cancelled or postponed during the pandemic, in addition to more than 15,000 European drivers leaving the UK, according to data from The Road Haulage Association (RHA).

As a result, delivery times for essential materials are delayed. Some products, for example aluminium, are now experiencing a delivery time of between 4-8 weeks, whereas it would usually be around 7 days. On average, we are finding that delivery is taking around three times longer than pre-pandemic.

3.  Slower sector recovery

“The risk is that the materials shortage and haulage delays could put the breaks on commercial construction work that is expected to continue through the summer as workers return to offices. As an industry, we might find that projects are being put on hold, which could in turn stifle the growth that we’re seeing in the sector.” Paul Michaelson, Eden Facades Construction Director explains.

4. Increased cost of labour

In the perfect storm created by Covid-19 and Brexit, as a sector there is also a shortage of skilled labour available, with The Office for National Statistics reporting this month that construction sector vacancies are the highest they have been for twenty years. Not necessarily a new problem for the industry, but one that has been exacerbated by the volume of workers currently on the furlough scheme. The subsequent demand for skilled labour has seen the day rate double for labourers and fixers.

Cautiously optimistic

Despite the challenges the industry is experiencing, Tony Hill, Managing Director at Eden Facades comments, “At Eden Facades we manage our projects and costs well and have a strong supply chain, but the current volatile nature of material costs and delivery does make planning very hard.

“As sub-contractors, we can’t make any changes to the specification we receive from a client, but by staying up to date with the latest product information, we can proactively work with our clients to help ensure they’ve assessed all the available alternative materials, should the need arise. When preparing a quote, we’re giving clients pricing options and availability from three or four different suppliers and urging them to keep an open mind about equal products which may have greater availability.

“Although the labour shortages, rising material and haulage costs, and supply chain delays are a challenge, we run a tight ship at Eden Facades, and strongly believe that through early engagement and open communication and collaboration with clients and contractors, we will be able to work together to find a way to move forward through this period, keep projects moving and come out stronger as a result.”

To talk to us about how we make provisions for volatility, and how we proactively work with our clients and supply chain to mitigate delays, get in touch on 01268 744199 or office@edenfacades.co.uk.