THE BACKGROUND
2021 has been a good year for our industry in a lot of ways.
After a turbulent 2020, construction’s been at the heart of the economic recovery – and recorded the highest rise in activity levels since 1997.
Projects have been re-started, momentum’s surged and there’s been a sharp rise in commercial work.
The flipside? A materials shortage and exorbitant costs. Demand for already scarce materials has gone through the roof, supplies have slipped, and prices have been pushed sky-high.
The Construction Leadership Council (CLC) predicts this’ll be the case for the rest of 2021 while the Office for National Statistics (ONS) has projected a rise of 7-8% in material prices during the rest of the year – with the price of timber expected to more than double.
What’s Behind the Shortage?
What with the pandemic, Brexit – and a home building boom during the various lockdowns – the industry’s been hit by the perfect storm.
Global pandemic and a global materials shortage
In a report analysing the effects of Covid-19 on construction, Peter Caplehorn of the Construction Products Association (CPA) and Construction Leadership Council reported that China and America experienced an economic recovery earlier than other countries and as such ‘sucked up large amounts of global commodities.’
It’s had a knock-on effect on the availability of steel, aluminium and timber, along with related components. The pandemic’s affected ironmongery in Italy and India, and white good production in Italy, too.
Brexit issues
Increased congestion at UK ports has led to delays; supply lines for core equipment from Europe has been lengthened and UK timber stocks have suffered, with 80% of softwood used in construction from Europe, and 90% of the softwood used for new-build homes coming from the continent.
The labour market’s been impacted too. The UK has lost 42% of its EU workers (and 4% of its UK workers) since 2020. Vacancies in the industry stand at 35,000 – an all-time high. Demand for labour is outstripping supply and trades are upping their rates due to being overwhelmed.
Soaring shipping costs
In summer 2020, the cost of shipping a 40ft container from Asia to Northern Europe soared from £1,061 to more than £5,873 by May 2021. The sharp global recovery in 2021, along with a pandemic-related shortage of empty shipping containers, is at the bottom of it. With demand increasing globally – and the UK importing many of its raw materials – order lead times are lengthening while prices are shooting up.
Boom in home reno’
An explosion in home building projects since late 2020 has led to a drain on materials, and slowdown in production in factories in the EU, leaving supply chains on the backfoot. Consumers are now being urged to put non-urgent home projects on hold until at least autumn to avoid escalating delays and costs.
Lorry driver shortages
The number of UK construction-industry hauliers is dropping. Complex admin changes and long waits, related to Brexit, are pushing hauliers away from construction and into the supermarket sector – which is booming due to home deliveries.
Which Materials Are Affected?
Timber
There’s been a nationwide shortage of timber since the first lockdown in March 2020, with MDF, veneers and solid wood particularly affected. The shortage, which started even before Covid, was made worse by unseasonably warm weather affecting production across Scandinavia – one of the world’s major timber suppliers.
Steel
A dramatic reduction in steel production in early 2020 led to a worldwide shortage, according to a British Electrotechnical and Allied Manufacturers Association report. British Steel, meanwhile, has recently stopped taking orders on structural steel sections due to ‘extreme demand’. Shortages could persist until the end of the year.
Roof tiles
Around 50% of National Federation of Roofing Contractors members have reported a shortage of concrete roof tiles. On average, lead times for concrete are between 20-36 weeks, and for clay between 4-8 weeks.
Plasterboard
There’s been a shortage in the paper used to wrap the plasterboard, which is sourced from Europe.
Electrical components
The CLC are predicting that shortages of certain electronic components – caused by a shortage of raw materials – could extend into 2022.
What We’re Doing to Help
We know these are challenging times, but we’re doing everything we can to help your projects go ahead as normal. In response to the materials crisis, our purchasing team are busy making new contacts in the UK and across Europe to ensure we’re able to deliver on all your requests.
WF’s Jason Morriss said, ‘With supply chain issues affecting all industries around the world – due to Covid measures, raw material shortages and issues with shipping – we know that nurturing and maintaining good supplier relationships has never been more important.
‘As a purchasing team, we’re always working to ensure these relationships keep on growing so that we can keep on overcoming these issues to supply our customers.’