THE SUPPLY OF rock mineral insulation is now on allocation, as are some roof tiles, according to the Construction Leadership Council’s latest product availability statement in June 2023.

Insulation supply is expected to normalise soon with increased production capacity and the restriction of roof tiles is said to be limited to a number of manufacturers. Most building materials are reported to have continuing good availability across the UK.

Supply on Allocation

There are also some reports that plasterboard is on allocation, but this appears to be a localised issue. They do not seem to be creating significant problems in any sector, the CLC says.

No major availability issues have been cited around either electrical components or timber, which in previous months were proving problematic.

Construction Output

At a macro level, construction output has risen by 2.7% since the start of the year despite adverse weather and various other factors such as strike action. The main area of growth over the past quarter has come from the repair and maintenance sector, but the commercial and civil engineering sectors have seen improvements as well. Retail trade has started to pick up with the return of warmer weather.

In the infrastructure sector, there have been few reports of material shortages, but materials inflation still plays a major part in increasing project costs.

The end of the Help to Buy scheme and continued uncertainty over interest rates, and its impact on mortgage availability, is constraining housebuilding.

The consensus for sector forecasts is that, year on year, demand will be down this year before picking up in in 2024.

2024 General Election

More broadly and with a general election looming in 2024, positive stimulus by government in any of these sectors may boost fortunes for the industry.

Overall, ONS figures show that materials prices rose 8.4% in the first four months of the year, with inflation levels slowing to 4.7% in April. Looking ahead, however, although many larger manufacturers of energy intensive products have begun hedging their energy contracts into 2024, the costs of those products will likely remain elevated compared to the levels seen before the outbreak of war in Ukraine.

Drought and Bankruptcies

The CLC says it is also monitoring the impact of drought conditions – including higher prices and delays to deliveries – affecting key logistic routes and shipping volumes from Asia and China and through the Panama Canal – though no firm data is yet available.

It says it is also aware that, with the availability and cost of financing options increasingly limited, commercial behaviour is likely to harden putting pressure on lower tiers and SME companies reducing cash-flow capacity and making liquidity a greater challenge. With the number of administrations in the construction sector at a very high level, this is another area the CLC will continue to monitor.

June 2023’s Product Availability 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 Product Availability working group.

 

>> Read more about product availability in the news

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