Materials
Winter 21/22 UK Market Report
In addition to materials price increases, there were also issues with materials availability and extended lead-in times.
Out of contractors responding to our latest survey, 60 percent said that the situation with the supply of materials and products is improving. Only 35 percent of non-contractor respondents thought that the situation is improving and generally the picture seems to be that the situation eased slightly at the end of 2021, but significant issues are still expected in 2022 due to strong global demand, a shortage of heavy goods vehicle drivers and global shipping issues. The “new normal” seems to be much longer lead-in times. Respondents to our recent survey saw 70 percent say that the issues with the supply of materials and products will last until at least the end of 2022.
Respondents to our survey showed 78 percent anticipate that material cost increases will stay at current elevated levels or worsen in 2022. Materials price increases had started to slow towards the end of last year, demonstrated by the BEIS All Work materials price index showing no change in the month to November, compared to a 22.7 percent increase in the year to November.
However, energy price escalation is affecting the production of energy-intensive materials and we have started to see further price increases, including energy surcharges, for energy-intensive materials such as steel, brick, block and ceramics.
Generally, it is not expected that prices will reduce back to pre-pandemic levels due to a variety of factors:
- Increased labour and energy costs
- High global demand as economies recover from the pandemic
- Businesses are rebuilding following the pandemic
- History indicates that once prices increase these tend not to revert back to pre-existing levels
- Many industries will need to make significant investment in order to reach decarbonisation/net zero targets.
