Product offerings continue to improve, and overall availability of building materials and products is currently at its best level since pre-pandemic levels were last seen at the end of 2019.
However, tight supply of semiconductors remains a challenge for manufacturers of electrical engineering products and gas boilers, even as inventories have recovered.
With current demand in the UK still outstripping supply and continuing capacity and logistics issues in Asia, extended delivery dates are likely to continue into mid-2023 and inflationary pressures on these products will persist.
In a recent statement by Builders Trades Association CEO John Newcombe and Building Products Association CEO Peter Capplehorn, co-chairs of the Building Leadership Council’s Product Availability Working Group, said:There is a large supply of UK timber here and prices have been lower for popular groups such as CLS; However, log prices in Europe and North America remain high and production is being reduced to reflect demand in the UK and Europe
This could create gaps in the supply chain if demand suddenly increases, but shouldn’t cause major problems if demand continues at current levels.
The statement continued: “As mentioned in previous statements, birch plywood – a commodity currently banned in Russia – is in short supply and some industries will need to consider alternatives.” “Birch plywood can be obtained legally from Finland and Latvia, but users must exercise due diligence. Any import of birch or birch furniture from China and Vietnam will be made from Russian wood which cannot be legally sold in the United Kingdom”.
Inflationary pressures, not affordability, are the main concerns for energy-intensive products such as glass, cement, concrete, RIP, drywall and brick. The warm autumn helped reduce gas demand, but prices could recover in the colder winter months. Furthermore, it is not clear what financial incentives energy-intensive producers will be able to receive from the government in the spring, when the current regime expires.
In his autumn announcement, the finance minister announced a package of tax increases and spending cuts aimed at stabilizing the economy and laying the foundation for growth. However, the near-term outlook will be challenging. While large-scale infrastructure projects will continue and larger homeowners currently have volumes, we are already seeing a slight decline in starts from smaller homebuilders and a steady decline in home improvement work as buyers of homes and customers are feeling pressured by rising costs. life and interest rates.
We also see consistently high levels of bankruptcy in the construction industry, particularly among small and medium-sized builders and specialist contractors. This is partly because companies that have become vulnerable during the pandemic are now having to withdraw their pandemic support. Other insolvencies are related to economic uncertainty, difficulty negotiating fixed price contracts, price inflation and reduced cash flow. Collaborative risk sharing will be key to maintaining the industry’s resilience and capacity in the future.
