Shortages Set to Continue into Next Year

IN THE LATEST UPDATE on materials shortages from the Construction Leadership Council (CLC) lead times for roof tiles have further lengthened to 24-30 weeks.

In a joint statement from John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, construction demand is reported as slightly levelling off mostly in the domestic Repair, Maintenance and Improvement sector.

However, demand remains high, with strong projections based on the anticipated pipeline of work for the rest of the year.

Product Shortages

Overall product supply has improved slightly with lead times stabilising in some product areas. Meanwhile, particular products, including timber battens, chipboard, steel lintels and PVC products remain in short supply.

The main concerns are around bricks and blocks, with some regions experiencing increased delays in securing supplies. Concrete roof tiles are also being affected with lead times averaging 24-30 weeks.

Haulage Capacity

There was some easing in the shortages of bulk and bagged cement in August, with additional cement brought from abroad. However, delivery is particularly constrained by the lack of domestic haulage capacity.

Extended delivery times will therefore likely continue until the end of the year and some allocation will likely remain in place.

The shortage of HGV drivers is affecting every sector and will take many months to resolve. This is a major contributor to delayed deliveries in all construction product areas; one manufacturer reported ‘factories piled with product that we cannot get out’.

Shipping

Transport issues continue to be the most common and pressing concern across the supply chain. Global shipping capacity has been reduced by 25% since the start of the pandemic, leading to delays and high container prices.

There is little sign of relief as we head into the Christmas season. The British Ports Association expects challenges to continue until at least the second quarter of 2022.

Price Increases

The level of price increases for many products has moderated but this may be short-lived, due to continued pressure on costs of raw materials, labour and transport.

Energy prices, particularly the doubling of the wholesale cost of gas, is also a critical factor for manufacturers, along with higher carbon prices related the increased use of coal-fired power stations.

This is likely to be exacerbated following a fire at a power facility in Kent shutting down a crucial link between the British and French power grids.

Working Collaboratively

Despite the current challenges, by working closely and collaboratively, the supply chain is just about managing under unprecedented circumstances.  We are not out of the woods yet.  While many factors could still cause disruption, we are currently in a better position than three to four months ago.

>>Read more about materials shortages in the news