DEMAND FOR CONSTRUCTION PRODUCTS has fallen from the peaks seen during spring and summer, according to a 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 Product Availability working group.
Lessening demand is shown by a slight softening in residential DIY and repair, maintenance and improvement projects. Nevertheless, the overall market remains extremely strong and the expectation from all regions and sectors is that this will continue during the final quarter of the year.
While product supply has improved in some areas, several critical challenges remain, particularly around logistics and related labour shortages, and rising product and input costs, the statement reads.
Shortages Set to Continue
The shortage of HGV drivers remains the most critical issue, cited by many as a key risk causing not only late deliveries but hiring, retention and wage inflation. The Construction Leadership Council (CLC) is warning that the logistics and road haulage sectors agree there will be no improvement in shortages until the first quarter of 2022 at the earliest.
Similarly, the well-known issues around global shipping continue to hamper deliveries of imported products, components and raw materials, particularly from Asia. Some UK ports continue to struggle, with HGV driver scarcities causing further delays in moving products from ships to roads. These issues, both global and domestic, are expected to continue well into 2022.
Utility Costs Push Prices Higher
There are also warnings that high gas and electricity costs and associated carbon costs, which are impacting both UK and overseas heavy-side manufacturers, will soon lead to significant price increases for ceramic products, glass, steel and bricks. For example, cement supply, though struggling, is holding steady; however, prices are likely to increase over the next few months due to increased energy costs. This will also have a knock-on effect on the price of concrete products.
Manufacturing capacity for bricks is at its maximum and some brickmakers are investing in expansion. However, exceptional demand has depleted current stock to a low level and the gap is being bridged with imported products. Extended lead times are likely to continue at least until the second half of next year. Additional capacity is due to come on stream in 2023.
Roof Tile Lead Times
Exceedingly high demand for roof tiles has hindered stocks from being replenished despite manufacturing being at full capacity. Manufacturers warn that driver shortages are a major impediment to shortening lead times, which will hopefully ease from the spring of next year. Concrete roof tiles are averaging lead times of 15 weeks and shortages are reportedly more acute in Scotland.
Timber is becoming more readily available and the price has fallen for some imported timber products. However, importers have cautioned that stock is being delayed at UK ports and abroad.
Bathware and sanitaryware imported from Asia is subject to disruption in shipping, which is unlikely to be fully resolved until 2023 when additional shipping container capacity is expected.
Paint and coatings products continue to be affected by global raw material shortages and supply chain issues resulting in increased lead times for some products as well as rising prices.