SKILLED LABOUR availability remains the most immediate and pressing concern for most in the Construction Leadership Council’s Material Supply Chain Group.

Current market conditions are thought to have been masking the true scale of this issue, which will be exposed when the market picks up, the group says.

As the first quarter of 2024 draws to a close, the latest report continues to show good levels of product availability across the board.

The beginning of 2024 has brought early signs of improvement in construction activity, the group reports, although housebuilding is expected to be flat for most of the year.

Construction Activity

Overall construction activity trended upward in January and February reaching its highest level since August 2023, despite poor weather. The weather is likely to have affected sales volumes through builders’ merchants, which remained static during the first two months of the year.

Most regions, however, saw an increase in volumes in March and there are hints of pent-up demand as a handful of regions are showing high levels of sales compared to 2023.

Prices generally have increased by 3 to 4%, which mirrors the wider economy where CPI inflation in January was 4.0%.

Supply Disruption

Previous concerns about the impact on products normally transported via the Red Sea seem to have dissipated or are manageable. Although some are experiencing increased shipping costs and slight delays in delivery of ironmongery and sanitaryware this is now described as an ‘inconvenience’, and not a major issue.

Separately, the electro-technical sector has flagged concerns about the ongoing geopolitical risks in East Asia and the potential impact on any construction products, plant and tools with chips sourced from that region. The group is considering adding this issue to its ‘horizon scanning’ and some members are independently analysing the situation.

This statement is 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 Material Supply Chain Group.

>> Read February’s Material Supply Chain Group report here

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