Construction Material and Product Availability Best Since Pandemic

AT THE BEGINNING of October 2022, all regions are reporting the best product availability in two years, both in the range and volume of products available, and delivery and lead times.

This is according to the latest statement from the Construction Leadership Council (CLC).

Bricks and Blocks

Availability of bricks has significantly improved and deliveries of aircrete blocks are being managed. Aircrete block manufacturers report strong sales of foundation blocks. Historically this leads to increased sales of above ground blocks 4-6 weeks later.

This year there is less correlation, and the increased below ground activity is likely due to builders seeking to get new starts registered before changes in Part L regulations next June.

Boilers

While longer delivery times for gas boilers remain and early ordering is recommended, availability is more positive than for some months.

Renewables and Heating

The situation is somewhat different for electro-technical products which continue to be affected by the restricted supply of semi-conductors. Now, with rising interest in products related to energy saving, renewable energy production, storage and heating, there are further concerns over both availability and price escalation for electrotechnical products that may impact both the construction and facilities management sectors.

Infrastructure and Housebuilding Demand

Although many construction sectors remain resilient and infrastructure and housebuilding activity has remained strong, there are early signs of softening in demand. This is most clearly seen in the home improvement sector. Here, the rising cost of living and increased costs of finance are denting consumer confidence. There is also a reduction in the number of large commercial construction contracts being placed.

Product Prices

Softening demand has led overall product price inflation to moderate slightly, dropping from 25% to around 17%. Nonetheless, concerns remain over inflation tied to energy costs for manufacturers, despite the government Energy Bill Relief Scheme and the fact that many manufacturers have already hedged energy costs.

The concerns are greatest for energy intensive products, such as bricks, blocks, glass, steel, cement and ceramics that have already seen sustained price increases during 2022. Some suppliers have already announced further increases from January.

Timber

Timber prices have fallen and there is plenty of stock on the ground, especially standard softwood sizes. There are, however, gaps in speciality markets such as birch plywood, which is affected by sanctions against goods from Russia. Anyone sourcing birch plywood should request full due diligence documentation to ensure it is legally sourced from Finland and Latvia.

The CLC says it is aware of cheap birch plywood coming from China and Vietnam, where there are no birch forests, and is likely sourced from Russia.  Russian birch logs processed elsewhere cannot be legally sold in the UK.

Steel Rebar

Availability is not an issue for steel but rising rebar prices may be, again due to increased energy costs throughout Europe. This has led to importing products from more unusual markets including Egypt, which may be of lesser quality. The EU has also banned the import of semi-finished steel product from Russia, which may affect the availability of some steel products, particularly steel plate.

Transportation

Shipping and logistics costs, capacity constraints and delays remain problematic but appear to be easing, though this is still very volatile depending on the products, countries and mode of transport involved.  For example, container shipping prices from Asia to the UK have dropped over 50% since January and punctuality has improved in general.

That said, the consensus amongst industry analysts is that high oil prices, strained global infrastructure, labour issues, Covid shutdowns in China and the war in Ukraine will cause logistics-related problems to persist and costs to remain elevated for the foreseeable future.

The Construction Product Availability working group statement comes from its co-chairs, John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association.

>> Read more about product availability in the news