Material Supply Chain Group Warns on Prices

THE MATERIAL SUPPLY CHAIN GROUP is warning that some price increases have started to come through.

The expectation is that the overall increase in the cost of construction products this year will be between 2% and 8%. The exact increase will depend on product type, with energy-intensive products seeing the largest increase.

There is also uncertainty about the price of steel as negotiations continue on UK-American tariffs.

Group Warns on Prices

In anticipation of market growth during the year, builders’ merchants are focused on having a range of stock on the ground to meet demand, the Group says.

It strongly advocates that the construction industry continues to work closely with their supply chain. It advises contractors to forecast and communicate their requirements early to suppliers, distributors and builders’ merchants to assist in production planning and delivery.

Overall, in the first quarter of 2025, little has changed in construction material supply since the Group’s last statement in December 2024. Within the current market, there are few reports of supply issues, it adds.

Housebuilding Expectations

Part of the reason for adequate construction supplies is that the anticipated housebuilding boom has not happened. The Group says that most had expected activity in the construction sector to increase in Q1 following the Chartered Purchasing Institute’s (CPI) December 2024 report showing slight but clear growth.

However, the opposite took place as activity shrank back in January due to the late start and weather disruptions, followed by a significant fall in the overall level of construction activity in February. The latest decline was driven by residential building activity, which contracted for the fifth consecutive month and civil engineering, which contracted at its fastest pace since 2020.

The March 2025 Statement is issued by John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Material Supply Chain Group.

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