Statement from 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.
The latest report from the Construction Leadership Council’s Material Supply Chain Group (formerly Product Availability Group) continues to show good levels of product availability across the board.
There are, however, reports of price volatility affecting two specific product areas, timber related products and PIR insulation boards, feeding into housing projects. A steady increase in timber prices was predicted last year and is the result of reduced production and stock in a slowing market. The main concern relates to PIR insulation where prices have increased significantly due to issues around the supply of chemicals used in their manufacture and a continued rise in demand could drive further price increases.
As stated in our previous report (19 March), supply lines via the Red Sea continue to be managed with only slight delays, although there are reports of increased container costs on this route. The group is also aware that hostilities in the region have the potential to widen and are monitoring this to assess the potential impact on other routes. In addition, the Asia/UK route is seeing further bottlenecks caused by the prolonged drought reducing traffic through the Panama Canal.
Throughout the year sales through builders’ merchants have shown a direct relationship between the weather and construction activity. Inclement weather dampened demand for landscaping and groundworks throughout the first quarter, but more recent spring-like conditions have driven an improvement in demand.
While the group does not anticipate a dramatic uplift in activity, optimism is increasing as we move into the summer. Many say they are now planning for an uptick at the year end and into 2025, which will necessitate careful planning to ensure adequate lines of supply.
The CLC’s key advice to everyone involved, particularly SME contractors and housebuilders, is to plan in advance, work closely with your supply chain and communicate your requirements early with suppliers, distributors and builders’ merchants. As we learned during the pandemic, collaborative, ongoing communication throughout the whole supply chain is mutually beneficial and essential to a healthy, productive UK construction industry.
