The Current Situation
Tap below to read updates on some of the top UK construction materials:
4 Reasons Behind the Construction Material Crisis
1
Interrupted Supply Chain Due to COVID
Like the rest of the world, 2020 was a major challenge for the construction sector, with many companies feeling unsure about their businesses future. Rewind back to the first lockdown and many sites were forced to close their doors, or operate at a much slower pace. Suppliers faced restrictions on delivering materials and the distribution chain took a major hit.
2
High Demand Post-Lockdown
When the world started to open up again, there was a major surge in the number of construction and home improvement projects. Whilst this was positive move on paper, the increase led to slowdown in the production of materials, meaning supply chains were stretched and prices began to soar. With demand exceeding the processing capabilities of suppliers, material costs were forced to increase and have struggled ever since.
3
Brexit and Lack of Tradespeople
Since the decision was made to leave the European Union, the burden on the construction industry has increased two-fold. Firstly the price of goods moving across the border has increased due to the additional border checks and administrative work – adding yet more disruption and costs to the material supply chain. The other issue that construction faces post-Brexit is the increasing crisis in labour supply. The construction industry relies heavily on foreign migrant labour with fears that there will be a national skills shortage.
4
Lack of HGV Drivers
As seen across major news outlets, the Road Haulage Association has reported a shortage of some 100,000 HGV drivers (though recent estimates place this figure closer to 70,000). It’s reported that this figure can be attributed to Brexit and Covid, however the Recruitment and Employment Confederation claim that there is a wider retention issue that won’t be improved until wages improve and Visas become more readily available for HGV drivers.
Why It Might Get Worse Before It Gets Better
Unfortunately, this situation is anything but stable. As demand continues to surge, disruptions in supply chains will continue to haunt construction companies up and down the UK. And to pile on yet more pressure, builders have fresh concerns to keep them busy with Russia’s invasion of Ukraine and the soaring energy prices looking set to impair the industry further.
Chief Executive of FMB, Brian Berry, has released a statement on the war in Ukraine, saying:
“As a result of Russia’s actions, supply chain disruption and the reallocation of certain types of materials will intensify the situation, with oil, steel, aluminium, timber and copper all set to be some of the worst affected. At a time when costs are surging, it puts builders in the unenviable position of having to raise costs for a customer base that are tightening their belts. Pragmatic policy delivery from government to help ease pressures on the sector and consumers alike will be needed.”
The economic shockwaves of the tragic events in Ukraine are already being felt across Britain, but it could also lead to shortages of materials such as bricks, roof tiles, and plastics. Despite the fact that only 1.25% of building products imported into the UK last year came from Russia, Ukraine or Belarus, CLC have warned that “there are likely to be higher levels of direct and indirect exposure to some product components either through raw materials or through higher prices in more-exposed European markets.”
The People It's Effecting
This is an unprecedented time, with some of the worlds largest economies closing and reopening at different times which has caused major disruption. We spoke to someone who has felt the full force of this crisis in Steve Rutherford, a small-business owner who owns his own building firm.
How Gordian Can Help
Over the past 85 years, we have worked with a wide range of building material companies and have a deep-rooted understanding of their problems and needs. As outlined above, the need for construction materials has increased and, whilst companies supply chains struggle to deal with the demand, the increasing requirement for material means there is a greater need for package securement.
We pride ourselves on being able to deliver cost-effective solutions that enhance organisational capability and decrease the time taken to complete operations.
Whilst the forecast remains bleak for delivery of material, the wider construction industry will continue to flourish across the UK and we are hopeful that things will return to normality for those smaller businesses. In the meantime, we are here to help on any package securement requirements and we’d love for you to get in touch if you have any questions.
