Seasonal Slowdown Eases Supply Pressures

THE SEASONAL SLOWDOWN has led to an improvement in UK construction supply and less pressure on prices, according to the latest statement from the Construction Leadership Council’s Product Availability working group.

The CLC says that while much has been done to ameliorate the issues seen earlier in the year, there remain challenges in UK production capacity for some products, and for the operation of the logistics and shipping sectors.

Return of Supply Pressure

The return of pressure on supply chains to deliver products is expected to continue as construction activity remains strong next year. Longer lead times and further price increases are anticipated.

Additionally, the rapid increase in cases of Omicron is likely to impact production and operations into the new year.

The group re-states the fact that 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.

They advise maintaining open lines of communication throughout the supply chain. The group also encourages all sectors to continue to work closely and collaboratively to manage challenges and plan future work.

Materials Shortages

• 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 & 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.
• Bricks and blocks remain in short supply for the reasons outlined in November’s 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. Also, as flagged in the November statement, manufacturers have raised concerns that rising energy costs will likely lead to price inflation.
• 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 with regard to 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 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, it is hoped that driver shortages will have less impact on construction in 2022.

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