Continuing materials shortages responsible for construction development delays

News Article

The construction sector is battling to keep new developments on track in the face of escalating prices and the unprecedented scarcity of materials.

The shortages, which have been blamed on Brexit, the Covid-19 pandemic and the recent Suez shipping delay, have impacted global supply chains.

As a result of a shortage of key construction materials, including timber, steel, some housing developers are reporting delays of up to 10 weeks on the completion of projects.

Costs have risen significantly and there are warnings that prices will increase at an above inflation rate of between 4% and 4.5% every year for the next three years.

Plastics, cement and aggregates have recently joined the list of construction materials in short supply, along with roof tiles, bricks, screws and fixing, plumbing items, sanitary ware, shower enclosures and electrical products.

The Construction Products Association (CPA) has warned that timber imports will remain problematic for the foreseeable future as there is insufficient being produced to meet world demand.

The CPA also claims that the number of materials on the shortage list has risen because other countries are prepared to pay higher prices than the UK in order to secure supplies.

Noble Francis, Economics Director with the CPA, said: “The main reason that construction products have had extended lead times and sharp price rises is that construction demand has recovered so sharply since the initial lockdown.

“Total construction output in March was already higher than pre-COVID and, in some particular sectors, output is double-digit higher than pre-COVID.”

Copper, steel, timber, plastics and polymers have seen some of the sharpest price rises over the past 12 months. Shipping costs have also spiralled. Mr Francis cited as an example, the cost of sending a container from China to the UK which has risen from $1,500 in summer 2020 to $8,300 at the start of May.

Palmers Solicitors’ Director and Head of Construction Law, Adam Davis, said: “Forecasts predict that construction output will rise by 12.9 per cent in 2021 but, as projects continue to ramp up this will put even more strain on the supply chain.

“Given the current uncertainty of sourcing sufficient materials, it is more important than ever to ensure that robust contracts are in place which provide protection in the event that outside factors cause a project to slip back.

“Our experience in working with the construction and engineering sector means we are ideally placed to provide independent, practical advice to help firms with their contracts.”

For help and support on contract submissions and project delivery compliance, please contact Palmers specialist construction team.