Page 46 - HW June-July 2021

global eyes
Product costs, delays may hinder UK construction recovery
DESPITE SUPPLY CHAIN issues, regrowth in UK construction activity continued throughout the first quarter of 2021, and double-digit growth is forecast this year, according to the Construction Product Association’s Spring Forecast.
With the whole of the UK construction industry operating during winter lockdown, activity was not hit as hard compared to the initial lockdown in the first half of 2020 or to other sectors of the economy.
UK construction output will rise by 12.9% in 2021 and 5.2% in 2022 compared with 14.0% in 2021, says the Construction Product Association (CPA), adding that the industry won’t recover 2020’s lost output until 2022.
The Spring Forecast however also highlights “significant risks” to the UK construction sector’s recovery, including supply constraints for key imported construction products and uncertainty around demand for housing new builds, and repair, maintenance and improvements works and commercial space.
Commenting on the Spring Forecast, CPA Economics Director, Noble Francis, says these “significant risks” are supply constraints in terms of extended lead times and sharp rises
in costs for vital imported products such as paints and varnishes, timber,
roofing materials, copper, steel, and polymers. This may hinder the ability of construction activity to increase in line with our forecast.”
High costs could well remain an issue into 2022: “Given that UK construction demand and global construction demand is likely remain high for the rest of this year, it is difficult to see imported construction product costs easing until next year, particularly for imported products going into housing new build, residential refurbishments or infrastructure.”
The Builders Merchants Federation (BMF) agrees with the CPA’s summary, saying in a joint release: “Demand both
in the UK and globally continues to dramatically outstrip supply and shows few signs of slowing during the seasonally busy summer months.
“In the UK, record sales of building materials coupled with strong pre-orders and full pipelines of work are all putting enormous pressure on the supply chain which, in some sectors, has not fully recovered from the impact of Covid.
“This suggests the unprecedented challenges around a number of key product areas, particularly imported products and materials, will likely persist into the second half of 2021.”
The shortages are both specific and
general, national, and regional, says the BMF.
Timber, roof tiles, some steel products and bagged cement continue to be in short supply, says the BMF, while paints, sealants, and chemical products, continue to be affected by raw material shortages, with paints additionally affected by a shortage of particularly metal cans.
The situation with insulation boards has also tightened, with PIR becoming harder to obtain and contractors actively seeking alternatives.
There are extended lead times for plasterboard, says the BMF, with one major manufacturer going on allocation. Some regions are also reporting delayed deliveries of bricks and blocks.
Electrical products have equally been affected by shortages of steel products and semi-conductors.
Plus, when products do arrive, says the BMF, a shortage of drivers (thanks to Brexit) means getting them in-store or to the site is now a “critical nationwide problem”.
“Inevitably, all of this is feeding into price inflation, and the expectation is that high demand coupled with tight supply will sustain elevated prices throughout the year.”
www.constructionproducts.org.uk www.bmf.org.uk
44 NZHJ | JUNE/JULY 2021
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