Building Contractors face supply chain worries to add to rising material costs, survey reveals
- Some small building firms report 12 month wait for certain bricks, in excess of 6 months for roof tiles.
- Builders merchants’ called on to give as much advanced warning as possible to their customers on rising costs.
Some small building firms are dealing with lead times of over a year for certain brick orders, according to a survey of members by the Federation of Master Builders.
A year for certain brick orders, according to a new survey that reveals skyrocketing material prices and extending order times.
While there has been rising concern about falling brick stocks and supply bottlenecks, the latest survey by the Federation of Master Builders of its members reveals excessively long lead times being quoted in the market. More than half of small building firms said that rising material prices are squeezing their margins.
As a result of the changes 30% had recommended clients use alternative materials or products to those originally specified. This has gone up from one in ten nearly a year ago. And now nearly one in five builders report making losses on their building projects due to material cost inflation, up from one in ten reporting this in July 2017.
The FMB’s latest State of Trade Survey shows that almost ninety per cent of building firms are expecting further rises over the next sixth months.
Longest lead times, in descending order
- Bricks were in shortest supply with the longest reported wait time being more than one year;
- Roof tiles were second with the longest reported wait time being up to six months;
- Insulation was third with the longest reported wait time being up to four months;
- Slate was fourth with the longest reported wait time being up to six months;
- Windows were fifth with the longest reported wait time being more than one year;
- Blocks were sixth with the longest reported wait time being up to four months;
- Porcelain products were seventh with the longest reported wait time being more than one year;
- Plasterboard was eighth with the longest reported wait time being up to two months;
- Timber was ninth with the longest reported wait time being up to two months;
- Boilers were tenth, with the longest reported wait time being more than one year.
Average materials price rises over 12 months
- Insulation increased by 16%;
- Bricks increased by 9%;
- Timber increased by 8%;
- Roof tiles increased by 8%;
- Slate increased by 8%;
- Windows increased by 7%;
- Blocks increased by 7%;
- Plasterboard increased by 7%;
- Boilers increased by 7%;
- Porcelain products increased by 6%.
Statement from Brian Berry, Chief Executive of FMB
Brian Berry, Chief Executive of the FMB, said: “Material prices have rocketed over the past year. The reason for this could include the impact of the depreciation of sterling following the EU referendum still feeding through.
“High demand due to buoyant international markets could also be contributing to price increases. What’s particularly worrying is that when prices have increased mid-project, almost one fifth of builders have absorbed the increase and therefore made a loss.
“Also, if material price increases weren’t enough of a headache for building firms, they are also experiencing material shortages with wait times ticking up across a range of materials and products. Worst case scenarios include firms waiting for more than one year for a new order of bricks.”
Berry added: “We are calling on builders’ merchants to give their customers as much advance warning of forthcoming material price increases or wait times as possible so that firms can warn their customers and plan ahead.”
“What we don’t want is for the number of building firms making losses on projects to increase as this could result in firms going to the wall. A large number of collapsing construction companies will have a terrible knock-on effect in the wider economy.”