UK Construction Market Report 1Q 2023
Materials
The number of respondents saying that material price increases are starting to settle increased to 53% in our Winter survey, up from circa 30% in our Autumn and Summer surveys.
However, energy intensive materials are still seeing price increases. Price notifications have been seen for bricks, cement, concrete, plasterboard and insulation in the new year.
There are also concerns that there will be further uplifts to come in the spring due to the impact of inflation and the revision to energy support.
The reopening of China’s economy following lifting of its zero-COVID policy will also draw on resources.
The Department for Business, Energy and Industrial Strategy’s (BEIS) ‘All Work’ construction materials price index stabilised towards the end of 2022, following the surge seen following Russia’s invasion of Ukraine.
Reductions in pricing for some elements have been seen due to lower commodities pricing and weakening demand related to the threat of global recession and weakening economies.
Timber
Timber saw significant cost escalation coming out of the COVID-19 pandemic in 2021, following strong demand. Overall timber pricing has been reducing from the highs seen, but the picture is complex as different timbers encounter different rates of change.
In its Construction Product Availability Statement on 24 January 2023, the CLC highlighted that “Timber prices have continued to fall but are expected to increase in 2Q as European mills are reducing production over winter.”
As well as cost escalation, there have been issues with the availability and delivery of materials and products.
Just over three-quarters of survey respondents feel that the situation is improving. Some longer lead-in times remain for items but now that problems are better established, workarounds are being found more easily.
Collaboration in the form of early engagement with suppliers and early orders is still recommended.
